Paper: Stevens (1999)

## 565-566: Data and Samples

	* The main sample is the 1968-1989 PSID years.
	* "Data for the first two years of the sample are not used since, initially, only spells starting after the beginning of the sample are included. Left-censored spells are later incorporated, using only the data from 1973 forward."
	* "All persons are included in the analysis in each year they are present in the sample, including those who leave prior to the end of the survey." [???????????]
	* FN 11: seems to imply that only values 1 and 2 of the PSID 'sample\_member' variable should be included. 'individuals joining the survey after 1967 though marriage *or other movements* into existing households" are not included. "In contrast, people who are born to original PSID sample members are included", which seems that 'sample\_member' == 2 should be included.
2. Use the PSID needs standard as the poverty level. Poor in any year if total HH money income < needs standard.
3. PSID is not a random sample; all estimates must be weighted to *consistently* (???) estimate population parameters. Also need to correct standard errors because of this (and cluster).

## 566-576: Results from the Hazard Rate Model

### A. Without Unobserved Heterogeneity

* Table 1: First, establish broad patterns of poverty entry and exit by estimates with only a duration term, for black and white people separately. Results for exit rates same as in Stevens (1994).
* Table 2: the baseline estimates from above are used to simulate the number of years spent poor over the next ten years.
	+ Column 1: distribution of completed poverty spell length
	+ Column 2: use both exit and reentry rates to simulate years spent poor over multiple spells in the next ten years
	+ Column 3: for persons who enter poverty during each of the years from 1968 to 1979, count years poor over the next ten years
	+ Q: WHY ARE COL 2 AND COL 3 SO DIFFERENT??? SHE SAYS "This is not surprising, given the absence of controls for any observables beyond spell duration, and the simple manner in which multiple spells have been combined" IDK IF I UNDERSTAND THIS.
* Table 3 and 4: add covariates into the hazard functions in the logit framework to estimate exit and reentry probabilities respectively. Covariates include calendar year, age, education of HH head, sex of HH head, and the duration terms.
	+ Mentions some differences in probabilities between sex of head, and notes patterns for education, age, and year/business cycle/trend. Overall not super insightful?

### B. Left-Censoring

The above is based on spells of poverty that have an observed beginning, which can bias estimates.

* First: reduce the number of duration terms in the hazard rates from 10 to 6 (argued this is reasonable based on estimates above).
* Second: estimate the model using 1973-1988 data. In 1973, observe whether each person has been poor in the previous six years, and so all poverty spells currently in progress can be used in the estimation including those that start prior to the sample start.
* Inclusion of left-censored spells makes little difference: exit rate estimated at 0.15 instead of 0.16 before, and reentry rate at 0.03 instead of 0.02.
* Overall, conclude bias from left-censored spells is "extremely small".

## Conclusion

1. ↑ In Stevens (1994), this is mentioned only in text, not presented graphically. Note that this is difference from Bane & Ellwood (1986) especially for exit probability of 1 year spells because they drop 1 year spells with small income changes.
2. ↑ Why not translate the logit estimates to probabilities? I have to check again how this works.
3. ↑ Include left-censored spells in rest of analysis (C.)