Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18165
Authors: 
Biewen, Martin
Year of Publication: 
2004
Series/Report no.: 
DIW Discussion Papers 429
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.
Subjects: 
Poverty persistence
dynamic binary response models
correlated random effects
initital conditions
strict exogeneity
JEL: 
D31
I32
J12
C33
Document Type: 
Working Paper

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