Modelling low income transitions

Lorenzo Cappellari, Stephen P. Jenkins

Research output: Contribution to journalArticlepeer-review

121 Citations (Scopus)


We examine the determinants of low income transitions using first-order Markov models that control for initial conditions effects (those found to be poor in the base year may be a non-random sample) and for attrition (panel retention may also be non-random). The model estimates, derived from British panel data for the 1990s, indicate that there is substantial state dependence in poverty, separate from persistence induced by heterogeneity. We also provide estimates of low income transition rates and lengths of poverty and non-poverty spells for persons of different types.
Original languageEnglish
Pages (from-to)593-610
Number of pages18
JournalJournal of Applied Econometrics
Publication statusPublished - 2004


  • income


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