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The dynamics of social assistance receipt: measurement and modelling issues, with an application to Britain

  • Lorenzo Cappellari

    ()

    (Istituto di Economia dell’Impresa e del Lavoro, Università Cattolica di Milano and ISER, Essex)

  • Stephen P. Jenkins

    ()

    (Institute for Social and Economic Research, University of Essex)

We model the dynamics of social assistance benefit receipt in Britain using data from the British Household Panel Survey, waves 1–15. First, we discuss definitions of social assistance benefit receipt, and present information about the trends between 1991 and 2005 in the receipt of social assistance benefits, and in annual rates of transition into and out of receipt. Second, we review potential multivariate modelling approaches especially the dynamic random effects probit models that are used in our empirical analysis and, third, discuss sample selection criteria and explanatory variables. Fourth, we present our regression estimation estimates and interpret them. The final section contains a summary of the substantive results, and highlights some lessons concerning application of the analysis for other countries and some methodological issues.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2008-101.pdf
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Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 101.

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Length: 72 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2008-101
Contact details of provider: Web page: http://www.ecineq.org
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  1. Lorenzo Cappellari & Stephen P. Jenkins, 2008. "Estimating low pay transition probabilities accounting for endogenous selection mechanisms," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 57(2), pages 165-186.
  2. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
  3. Michael J. Boskin & Frederick C. Nold, 1975. "A Markov Model of Turnover in Aid to Families with Dependent Children," Journal of Human Resources, University of Wisconsin Press, vol. 10(4), pages 467-481.
  4. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data.
  5. Stewart, M.B. & Swaffield, J.K., 1997. "Low Pay Dynamics and Transition Probabilities," The Warwick Economics Research Paper Series (TWERPS) 495, University of Warwick, Department of Economics.
  6. Paul Gregg & Susan Harkness & Sarah Smith, 2007. "Welfare Reform and Lone Parents in the UK," The Centre for Market and Public Organisation 07/182, Department of Economics, University of Bristol, UK.
  7. Hansen, Jörgen & Lofstrom, Magnus & Zhang, Xuelin, 2006. "State Dependence in Canadian Welfare Participation," IZA Discussion Papers 2266, Institute for the Study of Labor (IZA).
  8. Hansen, Jörgen & Lofstrom, Magnus, 1999. "Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare," IZA Discussion Papers 100, Institute for the Study of Labor (IZA).
  9. Biewen, Martin, 2004. "Measuring State Dependence in Individual Poverty Status: Are There Feedback Effects to Employment Decisions and Household Composition?," IZA Discussion Papers 1138, Institute for the Study of Labor (IZA).
  10. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer, vol. 13(4), pages 529-567.
  11. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  12. Paul Gregg & Jane Waldfogel, 2005. "Introduction," Economic Journal, Royal Economic Society, vol. 115(501), pages F1-F6, 02.
  13. repec:ese:iserwp:2002-08 is not listed on IDEAS
  14. Cappellari, Lorenzo & Jenkins, Stephen P., 2002. "Modelling Low Income Transitions," IZA Discussion Papers 504, Institute for the Study of Labor (IZA).
  15. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  16. Enberg, John & Gottschalk, Peter & Wolf, Douglas, 1990. "A random-effects logit model of work-welfare transitions," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 63-75.
  17. Wiji Arulampalam & Mark B. Stewart, 2009. "Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(5), pages 659-681, October.
  18. Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
  19. Marco Francesconi & Wilbert van der Klaauw, 2007. "The Socioeconomic Consequences of "In-Work" Benefit Reform for British Lone Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
  20. Hansen, Jörgen & Lofstrom, Magnus, 2006. "Immigrant-Native Differences in Welfare Participation: The Role of Entry and Exit Rates," IZA Discussion Papers 2261, Institute for the Study of Labor (IZA).
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