Household Size and Poverty
Inequality, Redistribution and Mobility
ISBN: 978-1-80043-040-2, eISBN: 978-1-80043-039-6
Publication date: 26 November 2020
Abstract
This paper investigates the effect of household size, and in particular of the number of children of different age groups, on poverty, defined as being in a situation of low income. We apply various static and dynamic probit models to control for the endogeneity of the variables of interest and to account for unobserved heterogeneity, state dependence, and serially correlated error components. Using Luxembourg longitudinal data, we show that the number of children of different age groups significantly affects the probability of being poor. However, the magnitude of the effect varies across different specifications. In addition, we find strong evidence of true poverty persistency due to past experience, spurious poverty persistency due to individual heterogeneity, and transitory random shocks.
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Acknowledgements
Acknowledgements
This research is part of the PersiPov project supported by the Luxembourg Fonds National de la Recherche (contract C10/LM/783502) and by core funding for LISER from the Ministry of Higher Education and Research of Luxembourg. Comments by Francesco Andreoli, Lennart Flood, Federico Perali, Anne Reinstadler, Philippe Van Kerm, Bertrand Verheyden, Don Williams, seminar participants, and a referee are gratefully acknowledged. None of those mentioned should however be held responsible for the present contents.
Citation
Fusco, A. and Islam, N. (2020), "Household Size and Poverty", Rodríguez, J.G. and Bishop, J.A. (Ed.) Inequality, Redistribution and Mobility (Research on Economic Inequality, Vol. 28), Emerald Publishing Limited, Leeds, pp. 151-177. https://doi.org/10.1108/S1049-258520200000028006
Publisher
:Emerald Publishing Limited
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