1. 1 THE INTERGENERATIONAL TRANSMISSION OF WORKING AND NON- WORKING POVERTY STATUS: FAMILY AND NEIGHBOURHOOD EFFECTS Ross Finnie Graduate School of Public and International Affairs at the University of Ottawa and Statistics Canada

2. 2 Relates to 3 Literatures Intergen. transmissions Intergen. transmissions Working poverty Working poverty Neighbourhood effects Neighbourhood effects

3. 3 Themes of the Paper 1. Intergen. transmission of poverty 2. Working vs. non-working status 3. Family and neighbourhood effects 4. Effects at different ages

4. 4 The Theory Kinds of transmission mechanisms: Kinds of transmission mechanisms: –Human capital investments in children –Imitation, values, preferences, etc. –Shared-determinants

5. 5 The Model Prob(y ijt ) = X it θ + βchildhood i + ε it Prob(y ijt ) = X it θ + βchildhood i + ε it Outcomes j (for individual i in t): Outcomes j (for individual i in t): –Poor or not (0-1): binomial logit –Working/non-working Poor: mn logit Childhood (fixed for individual i): Childhood (fixed for individual i): –Family: (working) poor or not –Nbhood: # (working) poor families

6. 6 The (LAD) Data 20% of Canadian tax filers from 1982 20% of Canadian tax filers from 1982 Tax-based information (incl. incomes) Tax-based information (incl. incomes) Link individuals to family of origin Link individuals to family of origin Also link to neighbourhoods Also link to neighbourhoods

7. 7 Estimation Samples Estimate for young adults (a ge 20-44) Estimate for young adults (a ge 20-44) Sample A: Sample A: –Just one year of BG vars. (when 15-19) Sample B: Sample B: –Track back in time (via mother) –When 1-4, 5-9, 10-14, 15-19 years old

8. 8 Empirical Findings Sample A only (here) Selected results “Average Marginal Effects”

9. 9 Table 1 – Baseline Model (“Poor” only) II. Multinomial Logit I. Logit Non-Working PoorWorking Poor Poor (WP or NWP) Male Neighbourhood effects Poor0.0779***-0.0400***0.0905*** Family effects Poor0.100***0.0257***0.127*** Female Neighbourhood effects Poor0.0547***-0.004040.110*** Family effects Poor0.0654***0.0128***0.0791***

10. 10 Table 2 – Standard Model (Poor vs. Working Poor)l II. Multinomial Logit I. Simple Logit Non-W. PoorW. PoorPoor Male Neighbourhood effects Poor0.144***-0.0885***0.152*** Working Poor-0.299***0.222***-0.267*** Family effects Poor0.136***0.0241***0.162*** Working Poor-0.0455***-0.00133-0.0557*** Female Neighbourhood effects Poor0.0983***-0.0354***0.143*** Working Poor-0.210***0.152***-0.146*** Family effects Poor0.0876***0.00684**0.0965*** Working Poor-0.0363***0.0111**-0.0316***

11. 11 Further Findings Adding family income Adding family income Dropping family status Dropping family status Alternative income measures Alternative income measures Alternative poverty measures Alternative poverty measures Effects by age Effects by age

12. 12 Conclusion WP is different from NWP WP is different from NWP –As an outcome –As a background effect Policy Implications Policy Implications Further research Further research