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Poverty Persistence in Sweden

Author

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  • Hansen, Jörgen

    (Concordia University)

  • Wahlberg, Roger

    (University of Gothenburg)

Abstract

This paper analyzes the persistence of poverty in Sweden using a hazard rate model based on multiple spells. The model also accounts for unobserved heterogeneity and possibly endogenous initial conditions. We estimate the model on a large representative Swedish panel data set, LINDA, for the years 1991 to 2001. The data contains precise information on household disposable income obtained from individual tax files. Poverty is defined using information on annual minimum needs standards determined by the Swedish National Board of Health and Welfare. The data indicates that poverty rates are highest for immigrants, especially refugee immigrants, and for households with children. Further, poverty rates declined, both for natives and for immigrants, between 1991 and 2001, partly as a result of improved labor market conditions. The empirical results suggest that there is significant negative duration dependence in both exit and entry hazard rates. Moreover, the transition rates are significantly affected by immigrant status, educational attainment, labor market conditions, age, and family status. Accounting for multiple spells shows that for two-parent families with two children who are represented by a male person, 44 percent of native households that falls into poverty at any given point in time remain poor in five or more out of the next ten years. For refugee and non-refugee households, the figures are 62 percent and 50 percent, respectively.

Suggested Citation

  • Hansen, Jörgen & Wahlberg, Roger, 2004. "Poverty Persistence in Sweden," IZA Discussion Papers 1209, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1209
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    References listed on IDEAS

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    Cited by:

    1. Matthew Lindquist & Gabriella Sjögren Lindquist, 2012. "The dynamics of child poverty in Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1423-1450, October.
    2. Michael Fertig & Marcus Tamm, 2010. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," German Economic Review, Verein für Socialpolitik, vol. 11(2), pages 150-168, May.
    3. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
    4. Marjan, MAES, 2008. "Poverty persistence among Belgian elderly in the transition from work to retirement : an empirical analysis," Discussion Papers (ECON - Département des Sciences Economiques) 2008042, Université catholique de Louvain, Département des Sciences Economiques.
    5. José Arranz & Olga Cantó, 2012. "Measuring the effect of spell recurrence on poverty dynamics—evidence from Spain," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(2), pages 191-217, June.
    6. Natalia Nehrebecka & Agata Kocia, 2009. "Analysis of poverty in Poland in 1997 - 2000 using hazard models," Working Papers 2009-09, Faculty of Economic Sciences, University of Warsaw.
    7. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2006. "The Persistence of Poverty in Rural China: Applying an Ordered Probit and a Hazard Approach," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25249, International Association of Agricultural Economists.
    8. Persson, Anna, 2011. "Earnings, income and poverty among welfare leavers in Sweden," Working Paper Series 2011:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Francesco Devicienti & Fernando Groisman & Ambra Poggi, 2009. "Informality and poverty: Are these processes dynamically interrelated? Evidence from Argentina," Working Papers 146, ECINEQ, Society for the Study of Economic Inequality.
    10. Bosco, Bruno, 2019. "One size does not fit all: Quantile regression estimates of cross-country risk of poverty in Europe," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 280-299.
    11. Maes, Marjan, 2008. "Poverty persistence among Belgian elderly: true or spurious?," ISER Working Paper Series 2008-24, Institute for Social and Economic Research.
    12. Michael Fertig & Marcus Tamm, 2010. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," German Economic Review, Verein für Socialpolitik, vol. 11(2), pages 150-168, May.
    13. Andriopoulou, Eirini & Tsakloglou, Panagiotis, 2011. "The determinants of poverty transitions in Europe and the role of duration dependence," MPRA Paper 30659, University Library of Munich, Germany.
    14. Bigsten, Arne & Shimeles, Abebe, 2008. "Poverty Transition and Persistence in Ethiopia: 1994-2004," World Development, Elsevier, vol. 36(9), pages 1559-1584, September.

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    More about this item

    Keywords

    unobserved heterogeneity; poverty persistence; duration dependence; multiple spells;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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