Poverty Dynamics and Vulnerability During a Growth Episode. Evidence from Bangladesh: 2000–2016

Abstract

ABSTRACT This study offers an uncommon perspective on household poverty dynamics over a 16-year period of sustained strong economic growth. We combine the large and high-quality consumption surveys used to produce official poverty statistics with information from a nationally representative household panel for rural areas to study poverty dynamics in Bangladesh between 2000 and 2016 using synthetic panel methods. We document the steady and substantial decline of persistent poverty, which has been particularly pronounced in rural areas. Transient poverty declined at a slower pace and affected twice as many households than persistent poverty (30% vs. 14%) between 2010 and 2016. There are stark differences in poverty dynamics across divisions, large and persistent disparities across education levels, and a strong but diminishing association with employment type in urban areas. High levels of mobility, relatively greater in urban Bangladesh, and the growing importance of transient poverty stress the need to consider measures to help poor households cope with income fluctuations and initiatives to address the needs of vulnerable households as core components of poverty reduction efforts.