Understanding the Drivers of Poverty Dynamics in Australian Households*

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Understanding the Drivers of Poverty Dynamics in Australian HouseholdsHielke Buddelmeyer Sher Verick The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. The results reveal that a range of household head, partner and demographic characteristics in addition to life-changing events have an impact on both the likelihood of remaining poor and slipping into poverty. These findings have important implications for Australian policymakers: tertiary education and employment are key factors in keeping households out of poverty; having a disability increases the probability of becoming poor and remaining in such a situation; households in outer-regional or remote areas are more likely to become poor and continue to live under such hardship; and finally, life-changing events, especially becoming separated, can lead households into persistent poverty. These results are robust to a range of poverty definitions. By drawing on research that utilizes such longitudinal data, policymakers will be much better informed about the drivers of material deprivation in Australia and subsequently how best to design policies that target and support the most vulnerable households.JEL Classification: D31, I32, C23, C35

Understanding poverty persistence in Spain

“…Based on our model estimates, GSD in the Spanish case amounts to 0.271-which is between that obtained in the British case (0.310) by Cappellari and Jenkins (2004a) and in the Australian one (0.260) by Buddelmeyer and Verick (2008). 27 Thus, in Spain, poverty in a given period increases the probability of being poor in the following period relative to another individual with identical characteristics that was not initially poor.…”

“…25 Differences in the predicted probabilities of persistence and entry among all individuals and the retained sample are negligible which confirms the ignorability of retention. 26 Buddelmeyer and Verick (2008) did not find significant correlations in the Australian case either, but argue that joint estimation improves efficiency. Cappellari and Jenkins (2004a) define aggregate state dependence (ASD) as the simple difference between the probability of being poor at t for those being poor at t − 1 and the probability of being poor at t for those who were not poor at t − 1.…”

“…Finally, and regarding the application of the same econometric strategy, apart from the original article by Cappellari and Jenkins (2004a) that studies the British case, Buddelmeyer and Verick (2008) have also used it for Australia, Fusco and Islam (2011) for Luxembourg and Faye et al (2011) in the case of Nairobi's slums. Their results are commented throughout the paper.…”

Contributions of Longitudinal Data to Poverty Measurement in Australia*

“…Rodgers and Rodgers (2006) estimated that almost 5 per cent of Australians had real equivalised disposable incomes less than $14,000 (2003–2004) per annum in the 4 years from 2000–2001 through 2003–2004. Buddelmeyer and Verick (2008) used the first five waves of HILDA data and found approximately 4 per cent of the population to be relatively poor in all 5 years. These authors identified some factors associated with becoming or remaining poor: lack of education and employment, long‐term disability, living in outer‐regional or remote areas and family break‐up.…”

The HILDA Survey: a case study in the design and development of a successful Household Panel Survey

“…Examples of just a select few of the many varied topics covered include: poverty dynamics (Buddelmeyer & Verick, 2008); gender wage inequality (Barón & Cobb-Clark, 2010); transitions in and out of non-standard employment (Buddelmeyer & Wooden, 2011); the changing relationship between cohabitation and divorce (Hewitt & de Vaus, 2009); the association between income inequality and mental health (Bechtel, Lordan & Prasada Rao, 2012); and the adaptation of subjective well-being to major life events (Frijters, Johnston & Shields, 2011). Numerous researchers have also used the data to evaluate specific policy initiatives.…”