Sources of Income Persistence: Evidence from Rural El Salvador

Walter Sosa-Escudero (), Mariana Marchionni and Omar Arias
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Walter Sosa-Escudero: University of San Andreas
Authors registered in the RePEc Author Service: Walter Sosa Escudero ()

Journal of Income Distribution, 2011, vol. 20, issue 1, 3-28

Abstract: This article uses a unique panel data set of rural El Salvador to investigate the main sources of persistence and variability in incomes. Our econometric framework validly reduces a general panel model to a dynamic linear model with a covariance structure that can be estimated efficiently with short panels. We find that life-cycle incomes are largely explained by the productive characteristics of families, such as education and access to public goods, and unobserved heterogeneity. Pure state dependence, arising from income shocks persistency, is of second order. In El Salvador, frequent transitory shocks are a more important source of income variation than in developed countries.

Keywords: income mobility; income dynamics; poverty traps; panel data; El Salvador (search for similar items in EconPapers)
JEL-codes: C23 D1 D31 I32 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Sources of Income Persistence: Evidence from Rural El Salvador (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:jid:journl:y:2011:v:20:i:1:p:3-28

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