Household Size and Poverty

Alessio Fusco and Nizamul Islam

A chapter in Inequality, Redistribution and Mobility, 2020, vol. 28, pp 151-177 from Emerald Group Publishing Limited

Abstract: This paper investigates the effect of household size, and in particular of the number of children of different age groups, on poverty, defined as being in a situation of low income. We apply various static and dynamic probit models to control for the endogeneity of the variables of interest and to account for unobserved heterogeneity, state dependence, and serially correlated error components. Using Luxembourg longitudinal data, we show that the number of children of different age groups significantly affects the probability of being poor. However, the magnitude of the effect varies across different specifications. In addition, we find strong evidence of true poverty persistency due to past experience, spurious poverty persistency due to individual heterogeneity, and transitory random shocks.

Keywords: Poverty; household size; longitudinal data; state dependence; endogeneity; serial correlation; Luxembourg; D10; D31; I32 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:reinzz:s1049-258520200000028006

DOI: 10.1108/S1049-258520200000028006

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