Measuring state dependence in individual poverty histories when there is feedback to employment status and household composition

Biewen, Martin

doi:10.1002/jae.1081

Cited by 144 publications

(161 citation statements)

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“…For example, poverty is considered to be more persistent if it is more likely for individuals to be poor in the current period if they were already poor in the previous period [6], [7]. This approach is more intuitive and informationally less demanding, but it is obviously also less informative.…”

Section: Discussion Of Pros and Cons When Should Poverty Be Considerementioning

confidence: 99%

“…This effect could occur because of an incentive mechanism (the loss of entitlement to welfare payments means that it is not worthwhile to take a job) or because slipping into poverty triggers processes that make future poverty more likely, such as demoralization, habituation, stigmatization, and depreciation of human capital. There is evidence that being poor in one period decreases the likelihood of being employed and of living with a partner in the next period, potentially giving rise to dynamic poverty effects [7].…”

Section: Mechanisms Of Poverty Persistencementioning

confidence: 99%

“…A typical finding is that around half of poverty persistence across periods is due to state dependence (the likelihood of being poor in one period depends on the poverty state of the previous period) and around half to observed and unobserved individual characteristics [6], [7].…”

Section: Martin Biewenmentioning

confidence: 99%

“…The studies cited here cover specific time periods, some of which are more recent than others. Some use data up the middle of the first decade of the 2000s [4], [7], [9], [10], [11]; others use data from the 1990s or early 2000s [1], [2], [5], [6], [8], [12], [13] or even from the 1980s or earlier [3].…”

Section: Limitations and Gapsmentioning

confidence: 99%

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Poverty persistence and poverty dynamics

Biewen¹

2014

izawol

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ProsA considerable part of poverty measured in a single period is transitory rather than persistent. Distinguishing between temporary and persistent poverty is important as economic policy should focus on preventing persistent poverty. Understanding characteristics of the persistently poor and events associated with entry and exit into poverty are important for informing anti-poverty policies. The characteristics of the persistently poor are often different from those of the currently poor. It is relevant for economic policy to know whether poverty persistence is due to individual characteristics or to poverty-trap mechanisms (being poor today increases the risk of being poor in the future). eLeVatOr PitCHA considerable part of the poverty that is measured in a single period is transitory rather than persistent. In most countries, only a portion of people who are currently poor are persistently poor. People who are persistently poor or who cycle into and out of poverty should be the main focus of anti-poverty policies. Understanding the characteristics of the persistently poor, and the circumstances and mechanisms associated with entry into and exit from poverty, can help to inform governments about options to reduce persistent poverty. Differences in poverty persistence across countries can shed additional light on possible sources of poverty persistence. aUtHOr'S Main MeSSaGeNot all people who are poor are persistently poor. Evidence suggests that unemployment, retirement, and single parenthood are closely associated with persistent poverty and that higher education tends to protect against it. There is also evidence of a poverty trap, meaning that policy should aim to prevent people from falling into poverty because once poor, the probability of being poor in the future increases. Policies that promote education, employment, and attachment to work will be most effective in reducing persistent poverty, along with policies that strengthen family and job stability (such as childcare subsidies). ConsHow to weight aspects of poverty persistence such as duration, intensity, and recurrence is unclear. It is difficult econometrically to separate poverty persistence due to individual characteristics from that due to poverty-trap mechanisms. Identifying events associated with poverty entry and exit can inform policies, but a large share of entries and exits cannot be clearly characterized in terms of individual events. There are commo...

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Section: Discussion Of Pros and Cons When Should Poverty Be Considerementioning

confidence: 99%

Section: Mechanisms Of Poverty Persistencementioning

confidence: 99%

Section: Martin Biewenmentioning

confidence: 99%

Section: Limitations and Gapsmentioning

confidence: 99%

See 2 more Smart Citations

Poverty persistence and poverty dynamics

Biewen¹

2014

izawol

Self Cite

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“…The specific application that we examine looks at how migration from villages in rural China a↵ects the likelihood that households will fall into poverty. Use of a dynamic binary response model focusses attention on whether or not a household passes a specific point in the distribution of consumption, or alternatively income (e.g., Biewen, 2009;Hansen and Wahlberg, 2009). By doing this, we address a policy-relevant question of how a treatment, in this case increased migration, a↵ects the likelihood that poor households will remain poor and the likelihood that non-poor households will fall into poverty.…”

Section: Persistence In Rural Chinamentioning

confidence: 99%

A Control Function Approach To Estimating Dynamic Probit Models With Endogenous Regressors, With An Application To The Study Of Poverty Persistence In China

Giles¹,

Murtazashvili²

2010

Policy Research Working Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This paper proposes a parametric approach to estimating a dynamic binary response panel data model that allows for endogenous contemporaneous regressors. Such a model is of particular value for settings in which one wants to estimate the effects of an endogenous treatment on a binary outcome. In order to demonstrate the usefulness of the approach, we use it to examine the impact of rural-urban migration on the likelihood that households in rural China fall below the poverty line. In this application, it is shown that migration is important for reducing the likelihood that poor households remain in poverty and that non-poor households fall into poverty. Furthermore, it is demonstrated that failure to control for unobserved heterogeneity would lead the researcher to underestimate the impact of migrant labor markets on reducing the probability of falling into poverty.JEL Classification: C13, C33, O15, P25

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Material Deprivation

Ivaldi¹,

Ciacci²

2021

Wiley StatsRef: Statistics Reference Online

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One of the best‐known definitions of “material deprivation” is provided by Townsend, according to which material deprivation refers to “a state of observable and demonstrable disadvantage in relation to the local community or the wider society or nation to which an individual, family or group belongs. The idea has come to be applied to conditions (that is, physical, environmental, and social status or circumstances) rather than resources and to specific and not only general circumstances, and therefore can be distinguished from the concept of poverty. The former sure enough can't be context free; it applies to specific circumstances and physical, environmental, and social conditions. Material deprivation is a complex phenomenon, as it concerns multiple aspects of reality and can be measured in different ways. In this paper, our aim is to highlight the most important elements of deprivation, as well as the analytical assumptions (often underlying and overlooked) that constitute the cornerstone of his study.

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Measuring state dependence in individual poverty histories when there is feedback to employment status and household composition

Cited by 144 publications

References 36 publications

Poverty persistence and poverty dynamics

Poverty persistence and poverty dynamics

A Control Function Approach To Estimating Dynamic Probit Models With Endogenous Regressors, With An Application To The Study Of Poverty Persistence In China

Material Deprivation

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