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Poverty Dynamics: An Analysis of the 1994 and 1995 Waves of the European Community Household Panel Survey. Published in European Societies, 2000, Vol 4 No 2

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  • Christopher T. Whelan

    (Economic and Social Research Institute (ESRI))

  • Richard Layte

    (Economic and Social Research Institute (ESRI))

  • Bertrand Maitre

    (Economic and Social Research Institute (ESRI))

  • Brian Nolan

    (Economic and Social Research Institute (ESRI))

Abstract

Recent poverty research internationally based on analysis of panel data has highlighted the importance of income dynamics. In this paper, we study mobility into and out of relative income poverty from one year to the next using data for twelve countries from the European Community Household Panel Survey (ECHP). The ECHP has unique potential as a harmonised data set to serve as the basis for comparisons of income and poverty dynamics across EU countries, and here we begin exploiting this potential by analysing income poverty transitions from Wave 1 to Wave 2. As well as describing the extent of these transitions, we analyse the pattern by fitting log-linear and linear by linear models commonly employed in the analysis of social mobility. Moving from general to specific models we show the relative impact of hierarchy, immobility and affinity effects. Our analysis shows that cross-national variation in short-term poverty dynamics is predominantly a consequence of "shift" rather than "association effects". Variation across countries in patterns of poverty persistence is extremely modest. Models that assume that the processes underlying poverty dynamics are constant across countries perform almost as well as those that allow for cross-national variability.

Suggested Citation

  • Christopher T. Whelan & Richard Layte & Bertrand Maitre & Brian Nolan, 2000. "Poverty Dynamics: An Analysis of the 1994 and 1995 Waves of the European Community Household Panel Survey. Published in European Societies, 2000, Vol 4 No 2," Papers WP129, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:wp129
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    File URL: http://www.esri.ie/pubs/WP129.pdf
    File Function: First version, 2000
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    References listed on IDEAS

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    1. Richard Breen, 1985. "Models for the comparative analysis of vertical mobility," Quality & Quantity: International Journal of Methodology, Springer, vol. 19(4), pages 337-352, October.
    2. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
    3. Duncan, Greg J & Gustafsson, Bjorn & Hauser, Richard & Schmauss, Gunther & Messinger, Hans & Muffels, Ruud & Nolan, Brian, 1993. "Poverty Dynamics in Eight Countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(3), pages 215-234.
    4. Sarah Jarvis & Stephen P. Jenkins, 1997. "Low income dynamics in 1990s Britain," Fiscal Studies, Institute for Fiscal Studies, vol. 18(2), pages 123-142, May.
    5. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
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