Modelling Low Income Transitions
We examine the determinants of low income transitions using first-order Markov models that control for initial conditions effects (those found to be poor in the base year may be a nonrandom sample) and for attrition (panel retention may also be non-random). Our econometric model is a form of endogeneous switching regression, and is fitted using simulated maximum likelihood methods. The estimates, derived from British panel data for the 1990s, indicate that there is substantial genuine state dependence in poverty. We also provide estimates of low income transition rates and lengths of poverty and non-poverty spells for persons of different types.
|Date of creation:||May 2002|
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|Publication status:||published in: Journal of Applied Econometrics, 2004, 19 (5), 593-610|
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- Cappellari, Lorenzo & Jenkins, Stephen P., 2002.
"Modelling low income transitions,"
ISER Working Paper Series
2002-08, Institute for Social and Economic Research.
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- Cappellari, Lorenzo & Jenkins, Stephen P., 2002. "Modelling Low Income Transitions," IZA Discussion Papers 504, Institute for the Study of Labor (IZA).
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