TY  - RPRT
        AU  - Biewen, Martin
        TI  - Measuring State Dependence in Individual Poverty Status: Are There Feedback Effects to Employment Decisions and Household Composition?
        PY  - 2004/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1138
        UR  - https://www.iza.org/publications/dp1138
        AB  - 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.
        KW  - correlated random effects
KW  - poverty persistence
KW  - strict exogeneity
KW  - initital conditions
KW  - dynamic binary response models
        ER  -