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Persisting Disadvantages: A Study of the Dynamics of Cumulative Deprivation

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  • Budría, Santiago

    (Universidad Nebrija)

  • García-Gómez, César

    (University of Valladolid)

Abstract

Identifying populations at risk of deprivation is crucial for effective policy design. Yet, much existing research focuses on single aspects, such as income or material deprivation, and often abstracts from deprivation dynamics. This study addresses this gap by analyzing the dynamics and socio-economic gradient of cumulative deprivation using data from the 2005–2021 waves of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Employing copula-based techniques and two econometric approaches—a Conditional Maximum Likelihood Estimator (CMLE) estimator and a two-stage Generalized Method of Moments (GMM) procedure—the analysis reveals significant state dependence, where past cumulative deprivation strongly predicts future deprivation. Schooling, employment, and parenthood emerge as key determinants. These findings underscore the importance of adopting multidimensional and temporal perspectives on deprivation, offering critical insights for more targeted and effective policy interventions.

Suggested Citation

  • Budría, Santiago & García-Gómez, César, 2025. "Persisting Disadvantages: A Study of the Dynamics of Cumulative Deprivation," IZA Discussion Papers 17908, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17908
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    References listed on IDEAS

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    1. Fry, Jane M. & Farrell, Lisa & Temple, Jeromey B., 2022. "Energy poverty and retirement income sources in Australia," Energy Economics, Elsevier, vol. 106(C).
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    10. Antonella D’agostino & Giovanni De Luca & Dominique Guégan, 2023. "Estimating Lower Tail Dependence Between Pairs of Poverty Dimensions in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(2), pages 419-442, June.
    11. Enrico Fabrizi & Chiara Mussida & Maria Laura Parisi, 2023. "Comparing Material and Social Deprivation Indicators: Identification of Deprived Populations," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(3), pages 999-1020, February.
    12. Caroline Dewilde, 2008. "Individual and institutional determinants of multidimensional poverty: A European comparison," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 86(2), pages 233-256, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Generalized Method of Moments; energy poverty; cumulative deprivation; state dependence; Wooldridge Conditional Maximum Likelihood;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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