‘It’s a trap!’ The degree of poverty persistence in Italy and Europe

Elena Giarda () and Gloria Moroni

Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) from Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi"

Abstract: This paper analyses poverty persistence in Italy and compares it with France, Greece, Portugal, Spain and the United Kingdom, focusing on its dynamics through the analysis of transitions into and out of poverty and the econometric quantification of true state dependence. The analysis is performed on the longitudinal component of the EU-SILC for the period 2009-2012. Descriptive statistics and transition matrices reveal that households in Italy are characterised by a higher degree of poverty persistence than in other countries. This evidence is confirmed by the estimation of Heckman’s dynamic random effects probit model. Italy is the country with the highest level of true state dependence estimated at 0.26, after Greece (0.30), while the UK has the lowest value (0.07). Italy also shows an impact of individual characteristics on current poverty lower, in absolute terms, than the lagged dependent variable. This may explain the gap in the persistent to current poverty ratio between Italy and other countries.

Keywords: poverty; dynamic probit models; state dependence; EU-SILC (search for similar items in EconPapers)
JEL-codes: C23 C25 I32 (search for similar items in EconPapers)
Pages: pages 31
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Degree of Poverty Persistence and the Role of Regional Disparities in Italy in Comparison with France, Spain and the UK (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mod:wcefin:0055

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