Empirical Economics

, Volume 40, Issue 3, pp 657–686 | Cite as

Estimating poverty persistence in Britain

Article

Abstract

This article uses longitudinal data from the BHPS (1991–2006) to document low-income dynamics and persistence for individuals living in Britain. Poverty exit and re-entry rates are estimated, and the resulting distribution of time spent in poverty is calculated, both in single and in multiple-spell frameworks. Poverty persistence predictions are also produced for various subgroups of the populations. In order to do so, I estimate a multiple-spell model of transitions in and out of poverty, controlling for observed and correlated unobserved individual heterogeneity and for a potential initial condition problem. Components-of-variance models are also used to predict the number of years in poverty for the targeted groups. The two alternative modeling approaches are shown to produce a consistent picture of poverty persistence.

Keywords

Poverty persistence Hazard models Multiple spells Unobserved heterogeneity Variance-components models 

JEL Classification

I32 C33 C41 

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Copyright information

© Springer-Verlag 2010

Authors and Affiliations

  1. 1.Dipartimento di Scienze Economiche e Finanziarie “G. Prato”University of TorinoTorinoItaly
  2. 2.LABORatorio Revelli – Collegio Carlo AlbertoMoncalieri (Torino)Italy

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