EconPapers    
Economics at your fingertips  
 

Measuring State Dependence in Individual Poverty Status: Are there Feedback Effects to Employment Decisions and Household Composition?

Martin Biewen

No 429, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Using a sample of prime-aged men from the German Socio-Economic Panel (GSOEP), this paper examines the effects of past poverty experience on future poverty status, future employment status and household composition. The empirical results suggest that even after controlling for observed and unobserved characteristics, past poverty experience increases the poverty risk of future periods. Moreover, there is evidence that experiencing poverty has a negative effect on future employment behaviour and on household cohesion. Apart from its economic significance, the existence of such feedback effects is interesting from an econometric point of view, as they represent a violation of the strict exogeneity assumption, which is usually invoked in estimating dynamic qualitative response models with unobserved heterogeneity.

Keywords: Poverty persistence; Dynamic binary response models; Correlated random effects; Initital conditions; Strict exogeneity (search for similar items in EconPapers)
JEL-codes: C33 D31 I32 J12 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26) Track citations by RSS feed

Downloads: (external link)
http://www.diw.de/documents/publikationen/73/diw_01.c.41894.de/dp429.pdf (application/pdf)

Related works:
Working Paper: Measuring State Dependence in Individual Poverty Status: Are There Feedback Effects to Employment Decisions and Household Composition? (2004) Downloads
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:diw:diwwpp:dp429

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().

 
Page updated 2019-04-18
Handle: RePEc:diw:diwwpp:dp429