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Book part
Publication date: 6 August 2014

Lorenzo Cappellari and Stephen P. Jenkins

We analyse the dynamics of social assistance benefit (SA) receipt among working-age adults in Britain between 1991 and 2005. The decline in the annual SA receipt rate was…

Abstract

We analyse the dynamics of social assistance benefit (SA) receipt among working-age adults in Britain between 1991 and 2005. The decline in the annual SA receipt rate was driven by a decline in the SA entry rate rather than by the SA exit rate (which also declined). We examine the determinants of these trends using a multivariate dynamic random effects probit model of SA receipt probabilities applied to British Household Panel Survey data. We show how the model may be used to derive year-by-year predictions of aggregate SA entry, exit and receipt rates. The analysis highlights the importance of the decline in the unemployment rate over the period and other changes in the socio-economic environment including two reforms to the income maintenance system in the 1990s and also illustrates the effects of self-selection (‘creaming’) on observed and unobserved characteristics.

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Book part
Publication date: 11 December 2004

Stephen P. Jenkins and Lars Osberg

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The Economics of Time Use
Type: Book
ISBN: 978-1-84950-838-4

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Book part
Publication date: 6 August 2014

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Safety Nets and Benefit Dependence
Type: Book
ISBN: 978-1-78441-110-7

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Book part
Publication date: 6 August 2014

Sebastian Königs

I study state dependence in social assistance receipt in Germany using annual survey data from the German Socio-Economic Panel for the years 1995–2011. There is…

Abstract

I study state dependence in social assistance receipt in Germany using annual survey data from the German Socio-Economic Panel for the years 1995–2011. There is considerable observed state dependence, with an average persistence rate in benefits of 68 per cent comparing to an average entry rate of just above 3 per cent. To identify a possible structural component, I estimate a series of dynamic random-effects probit models that control for observed and unobserved heterogeneity and endogeneity of initial conditions. I find evidence of substantial structural state dependence in benefit receipt. Estimates suggest that benefit receipt one year ago is associated with an increase in the likelihood of benefit receipt today by a factor of 3.4. This corresponds to an average partial effect of 13 percentage points. Average predicted entry and persistence rates and the absolute level of structural state dependence are higher in Eastern Germany than in Western Germany. I find only little evidence for time variation in state dependence around the years of the Hartz reforms.

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Safety Nets and Benefit Dependence
Type: Book
ISBN: 978-1-78441-110-7

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Book part
Publication date: 1 October 2008

Lorenzo Cappellari and Stephen P. Jenkins

We model transitions between unemployment, low-paid and high-paid employment by British men using a first order Markov model with endogenous switching that also takes into…

Abstract

We model transitions between unemployment, low-paid and high-paid employment by British men using a first order Markov model with endogenous switching that also takes into account the endogeneity of initial conditions, selection into employment, and sample attrition. Our estimates indicate that all three selectivity issues are non-ignorable. We demonstrate several interrelationships between the dynamics of (un)employment and low-paid work between one year and the next, represented by forms of (cross-)state dependence. Controlling for heterogeneity, the probability of a man having a low-paid job in one year depends not only whether he had a job a year before but also whether that job was low paid. The probability of his being employed at all depends on whether he had a job the previous year.

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Work, Earnings and Other Aspects of the Employment Relation
Type: Book
ISBN: 978-1-84950-552-9

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Book part
Publication date: 3 April 2003

Frank A. Cowell and Stephen P. Jenkins

The techniques of simple random sampling are seldom appropriate in the empirical analysis of income distributions. Various types of weighting schemes are usually required…

Abstract

The techniques of simple random sampling are seldom appropriate in the empirical analysis of income distributions. Various types of weighting schemes are usually required either from the point of view of welfare-economic considerations (the mapping of household/family distributions into individual distributions) or from the point of view of sample design. The different types of weights have different implications for the sampling distribution of estimators of welfare indices.

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Inequality, Welfare and Poverty: Theory and Measurement
Type: Book
ISBN: 978-0-76231-014-2

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Book part
Publication date: 3 April 2003

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Inequality, Welfare and Poverty: Theory and Measurement
Type: Book
ISBN: 978-0-76231-014-2

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Book part
Publication date: 6 August 2014

Kenneth Y. Chay and Dean R. Hyslop

We examine the roles of sample initial conditions and unobserved individual effects in consistent estimation of the dynamic binary response panel data model. Different…

Abstract

We examine the roles of sample initial conditions and unobserved individual effects in consistent estimation of the dynamic binary response panel data model. Different specifications of the model are estimated using female welfare and labor force participation data from the Survey of Income and Program Participation. These include alternative random effects (RE) models, in which the conditional distributions of both the unobserved heterogeneity and the initial conditions are specified, and fixed effects (FE) conditional logit models that make no assumptions on either distribution. There are several findings. First, the hypothesis that the sample initial conditions are exogenous is rejected by both samples. Misspecification of the initial conditions results in drastically overstated estimates of the state dependence and understated estimates of the short- and long-run effects of children on labor force participation. The FE conditional logit estimates are similar to the estimates from the RE model that is flexible with respect to both the initial conditions and the correlation between the unobserved heterogeneity and the covariates. For female labor force participation, there is evidence that fertility choices are correlated with both unobserved heterogeneity and pre-sample participation histories.

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Book part
Publication date: 6 August 2014

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Safety Nets and Benefit Dependence
Type: Book
ISBN: 978-1-78441-110-7

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Book part
Publication date: 11 May 2017

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Skill Mismatch in Labor Markets
Type: Book
ISBN: 978-1-78714-377-7

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