Modelling Poverty by not Modelling Poverty: AnApplication of a Simultaneous Hazards Approach to theUK

We pursue an economic approach to analysing poverty. This requires a focus onthe variables that individuals can influence, such as forming or dissolving aunion or having children. We argue that this indirect approach to modellingpoverty is the right way to bring economic tools to bear on the issue. In ourimplementation of this approach, we focus on endogenous demographic andemployment transitions as the driving forces behind changes in poverty. Weconstruct a dataset covering event histories over a long window and estimatefive simultaneous hazards with unrestricted correlated heterogeneity. The modelfits the demographic and poverty data reasonably well. We investigate theimportant parameters and processes for differences in individuals’ povertylikelihood. Employment, and particularly employment of disadvantaged womenwith children, is important.[...]