Mixed fortunes: A study of poverty mobility among small farm households in Chile, 1968–86

Abstract

This study is based on a panel sample of small farm households drawn from eight rural communities in Chile interviewed in 1968 and 1986. The incidence and intensity of poverty based on primary income increased over this period. However, after including earnings from the minimum employment programmes and public transfers, both the headcount ratio and squared poverty gap fell markedly between the two surveys. Mobility analysis showed more households moving out of than into poverty. Of those households who became impoverished, around half may have suffered a transitory decline in income in 1986. The other half experienced pauperisation as a result of investing in projects with negative rates of return, investing in the accumulation of human capital by their children, sustaining a large rise in the household's dependency ratio or suffering political discrimination in the labour market. Per capita income was positively related to schooling of the household head (in 1968), land ownership (in 1986) and living in the Central Valley (in both years). Income per head was negatively related to household size (in both years) and to the presence of individuals in the household with physical or mental disabilities (in 1986).