Poverty persistence among the elderly in the transition from work to retirement

Marjan Maes

The Journal of Economic Inequality, 2013, vol. 11, issue 1, 35-56

Abstract: On the basis of matched Income Tax/Census data, the majority of the elderly poor in Belgium appear to be persistently poor. The question arises as to why this might be so. To the extent that individual characteristics such as abilities or tastes persist over time, these may also be the reason that individuals persist in poverty over time. In that case, one expects that once individual characteristics are controlled for, duration dependence in poverty becomes spurious. The alternative possibility is that the poverty experience itself has a causal impact on future poverty. This may be because of work disincentives, lack of investment in human capital and/or loss of motivation during the period of job search. The reasons for dependence in poverty are of interest for developing effective poverty-reducing policies. The estimation of a multiple-spell hazard model of transitions in and out of poverty, that allows for unobserved heterogeneity and a significant initial condition problem, supports the suggestion of true duration dependence in poverty. In Belgium the elderly unemployed are exempted from job search and lack any training or counselling from government agencies, while workers above 50 are given strong financial incentives to leave the labour market as soon as possible through different kinds of early retirement schemes. Copyright Springer Science+Business Media, LLC. 2013

Keywords: Poverty persistence; Work disincentives; Human capital; Multiple spell discrete-time hazard model; C41; J14; J26; I32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10888-011-9200-5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jecinq:v:11:y:2013:i:1:p:35-56

Ordering information: This journal article can be ordered from
http://www.springer. ... th/journal/10888/PS2

DOI: 10.1007/s10888-011-9200-5

Access Statistics for this article

The Journal of Economic Inequality is currently edited by Stephen Jenkins

More articles in The Journal of Economic Inequality from Springer, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().