Using the 2008-2011 EU-Statistics on Income and Living Conditions data, we implement a dynamic three-level model to analyze poverty persistence in 26 EU countries. We isolate true state dependence phenomena by disentangling the effects of observed and unobserved heterogeneity at country level and employ cofactors not previously considered by the literature. Estimates show that unobserved heterogeneity across individuals remains large, even after explicitly controlling for the observable components of individual characteristics. The initial value of poverty has large effects on current poverty status but this effect is not uniform across countries. The risk of poverty is negatively related to the size of the structural middle class and to the level of structural social expenditure but it increases when lagged total public expenditure increases (with respect to the structural value). There is strong evidence of true state dependence

Bosco, B., & Poggi, A. (2020). Middle Class, Government Effectiveness and Poverty in the EU: A Dynamic Multilevel Analysis. REVIEW OF INCOME AND WEALTH, 66(1), 94-125 [10.1111/roiw.12403].

Middle Class, Government Effectiveness and Poverty in the EU: A Dynamic Multilevel Analysis

Bosco, B
;
Poggi, A
2020

Abstract

Using the 2008-2011 EU-Statistics on Income and Living Conditions data, we implement a dynamic three-level model to analyze poverty persistence in 26 EU countries. We isolate true state dependence phenomena by disentangling the effects of observed and unobserved heterogeneity at country level and employ cofactors not previously considered by the literature. Estimates show that unobserved heterogeneity across individuals remains large, even after explicitly controlling for the observable components of individual characteristics. The initial value of poverty has large effects on current poverty status but this effect is not uniform across countries. The risk of poverty is negatively related to the size of the structural middle class and to the level of structural social expenditure but it increases when lagged total public expenditure increases (with respect to the structural value). There is strong evidence of true state dependence
No
Articolo in rivista - Articolo scientifico
Scientifica
cross-country poverty dynamics; government effectiveness; middle class; multilevel model; Economics and Econometrics
English
94
125
32
Anno_pub:2020-
Bosco, B., & Poggi, A. (2020). Middle Class, Government Effectiveness and Poverty in the EU: A Dynamic Multilevel Analysis. REVIEW OF INCOME AND WEALTH, 66(1), 94-125 [10.1111/roiw.12403].
Bosco, B; Poggi, A
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10281/218395
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