Reflets et Perspectives de la Vie Economique vol:L issue:4 pages:143-154
In the paper we present a dynamic micro-simulation model to examine short and long term mobility in and out of poverty in a context of educational deprivation and work opportunities. Using eight waves of the Belgian Household Panel Study transformed into monthly data, we estimate a combined dynamic selection model for employment and poverty, conditional on educational attainment and work status. We then present paths in and out of poverty, for individuals without lower and higher secondary education and without work at the beginning of the observation period. Our results point out that work and educational resources play a different role in the short and longer term. A lack of lower secondary qualification renders people much more vulnerable to (extreme) poverty and reduces their chances to escape this condition. By contrast, without higher secondary education, up- and downward mobility is not different from that of the total population. Without work, the immediate risk of falling below the poverty threshold or below the minimum income is high. This situation, however, seems to be mostly temporary.