Asset Poverty Research Articles

Asset poverty in Korea: Levels and composition based on Wolff's definition

Kim K‐S, Kim YM. Asset poverty in Korea: levels and composition based on Wolff's definitionThe main purpose of the study was to lay the groundwork for establishing a more effective asset‐building policy through accurate measurement and analysis of the level and composition of the asset‐poor Korean population. We defined four asset poverty lines according to the concepts of basic needs, limited period of time and wealth‐type resources from Wolff's operational definition. The size of the Korean asset‐poor population, when considered from the perspectives of net assets and liquid assets, was found to remain around 12.7–13.2 and 32.8–36.5 per cent respectively. This study suggests that it is necessary to establish a differentiated asset‐building policy by age group and to prepare more realistic alternatives to solve housing problems, while empirically verifying the need for an accurate asset poverty line which reflects the definition of asset poverty.

Reentering Asset Poverty after an Exit: Evidence from the PSID

In order to be successful at improving household’s financial self‐sufficiency and stability, asset‐building policies must be designed to prevent households from falling back into asset poverty once they exit it. This paper uses the Panel Study of Income Dynamics data from 1994 to 2007 to analyze the influence of life events, demographics and financial behaviors on the duration out of asset poverty. We find evidence that suggests there are structural barriers to asset acquisition. Asset accumulation at levels equal to nine months worth of income at the income poverty level or greater is important for improving a family’s odds of permanently escaping asset poverty. Additionally, minimizing debt and diversifying the asset portfolio to include more productive assets are important for maintaining assets. This paper provides some insights on policies to help individuals more successfully transition out of asset poverty.

Trend and Decomposition of Asset Poverty in Korea

지난 10년간 우리나라는 몇 번의 경제위기를 겪으며 자산 가치의 급등을 경험하였다. 그러나 자산을 둘러싼 관심은 일부 고자산 계층에 집중되어 자산이 없거나 적은 자산을 가진 계층들의 자산 추세나 경향에 대한 관심은 상대적으로 적었다. 본 연구는 한국노동패널자료 2∼11차 자료를 이용하여 우리나라 전반의 자산 빈곤의 추세를 살펴보고, 1999년과 2008년 사이의 자산빈곤율의 변화를 Datt & Ravallion(1992)의 분해 방법을 사용하여 성장과 분배요인으로 분해하여 보았다. 본 연구를 통해 얻은 결과는 다음과 같다. 10년간 우리나라 가구의 전반적 자산액의 규모는 점진적으로 증가하여왔음에도 자산빈곤 역시 계속 증가하는 역설적인 상황이 전개되어 왔다. 1999년과 2008년 간의 자산빈곤율의 변화를 요인 분해한 결과, 두 연도간의 빈곤율 격차는 성장요인에 의해 빈곤율이 감소되었을 것임에도 분배적 요인이 빈곤율을 증가시켜 전체적인 빈곤율의 증가를 가져온 것으로 나타났다. 이는 지난 10년 간 우리나라 자산빈곤 변화에 있어 자산의 전반적 성장에 의한 빈곤 감소효과보다 분배 악화에 의한 빈곤 증가효과가 훨씬 컸다는 것을 보여준다.

Land-use poverty traps identified in shifting cultivation systems shape long-term tropical forest cover

In this article we illustrate how fine-grained longitudinal analyses of land holding and land use among forest peasant households in an Amazonian village can enrich our understanding of the poverty/land cover nexus. We examine the dynamic links in shifting cultivation systems among asset poverty, land use, and land cover in a community where poverty is persistent and primary forests have been replaced over time--with community enclosure--by secondary forests (i.e., fallows), orchards, and crop land. Land cover change is assessed using aerial photographs/satellite imagery from 1965 to 2007. Household and plot level data are used to track land holding, portfolios, and use as well as land cover over the past 30 y, with particular attention to forest status (type and age). Our analyses find evidence for two important types of "land-use" poverty traps--a "subsistence crop" trap and a "short fallow" trap--and indicate that the initial conditions of land holding by forest peasants have long-term effects on future forest cover and household welfare. These findings suggest a new mechanism driving poverty traps: insufficient initial land holdings induce land use patterns that trap households in low agricultural productivity. Path dependency in the evolution of household land portfolios and land use strategies strongly influences not only the wellbeing of forest people but also the dynamics of tropical deforestation and secondary forest regrowth.

Asset Linked Poverty Evaluation in India

Assets serve as a buffer to reduce vulnerabilities towards becoming poorer. In India it is seen that the asset holding class is skewed across States and asset inequality is also high in most of the States. The study tries to find out how asset poverty is linked with income poverty. It also finds out the path way of the households to move out of poverty. It suggests that the increase in literacy rate is important amongst those workers who are dependent on the agricultural sector for their livelihood. It decreases poverty and ultimately they will be able to move away from agriculture and get job opportunity in the manufacturing sector. The main policy implication of the paper is that human capital formation is a prerequisite for poverty alleviation.

Chronic and Structural Poverty in South Africa: Challenges for Action and Research

Ten years after liberation, the persistence of poverty is one of the most important and urgent questions facing South Africa. This paper reflects on some of the findings of research undertaken as part of the participation of the Programme on Land and Agrarian Studies (PLAAS) at the University of the Western Cape in the work of the Chronic Poverty Research Centre, situates it within the broader literature on poverty in South Africa, and considers some emergent challenges. Though PLAAS's survey, being only the first wave of a panel study, does not yet cast light on short term poverty dynamics, it illuminates key aspects of the structural conditions that underpin poverty that lasts for a long time: the close interactions between asset poverty, employment vulnerability and subjection to unequal social power relations. Coming to grips with these dynamics requires going beyond the limitations of conventional sustainable livelihoods analyses and functionalist analyses of South African labour markets. The paper argues for a re-engagement with the traditions of critical sociology, anthropology and the theoretical traditions that allow a closer exploration of the political economy of chronic poverty at micro and macro level.

An Asset-Based Approach to Vulnerability: The Case of Small-Scale Fishing Areas in Cameroon and Nigeria

This paper analyses vulnerability to poverty of rural small-scale fishing communities using cross-section data from 295 households in Cameroon and 267 in Nigeria. We propose a vulnerability measure that incorporates the idea of asset poverty into the concept of expected poverty, which allows decomposing expected poverty into expected structural–chronic, structural–transient, and stochastic–transient poverty. The findings show that most households in our study areas are expected to be structurally–chronic and structurally–transient poor. This underlines the importance of asset formation for long-term poverty reduction strategies. Further refinements are possible with longitudinal data and information about future states of nature.

Debt to Society: Asset Poverty and Prisoner Reentry

Every year, millions of people exit American jails and prisons and attempt to reintegrate into society. Ex-offenders face many obstacles during the transition. Scholars contend that securing employment is central to a successful transition. A job that allows an ex-offender to earn an income above the poverty line is especially significant, recent studies have shown. Consequently, many prisoner reentry initiatives are focused on expanding employment opportunities for ex-offenders. However, the almost exclusive emphasis on employment as the measurement of economic well-being is short-sighted because it ignores the importance of financial education and asset ownership. Prisoner reentry programs should include an emphasis on financial education in addition to an emphasis on employment as a means of reducing recidivism rates and improving the economic well-being of the ex-offenders and receiving communities. The paper concludes with a discussion of policy implications.

Developing an asset threshold using the consensual approach: Results from Mashonaland West, Zimbabwe

AbstractAlthough poverty lines have been constructed on the basis of an income threshold, this article defines a poverty line on the basis of an asset threshold using the consensual approach as postulated by Mack and Lansley. In this article, an asset threshold is defined using this approach, which is a European method in an African rural setting. The determination of the asset threshold—the Minimally Adequate Asset Level, which is context‐sensitive, fixed bundle of assets, is the major contribution of this article. This asset poverty line opens up possibilities for calculating asset‐based FGT measures as well as an asset‐gini‐coefficient. The article also shows that location matters in the perception of poverty as a consequence of differing lifestyles. Copyright © 2009 John Wiley & Sons, Ltd.

Financial well-being of US parents caring for coresident children and adults with developmental disabilities: An age cohort analysis

Background Understanding how financial well-being changes through the life course of caregiving parents of children with developmental disabilities is critically important.Methods We analyse SIPP (U.S. Census Bureau) data to describe income poverty, asset poverty, income, net worth, and liquid assets of US parents (N = 753) of children with developmental disabilities.Results Income and asset poverty was greatest for the youngest and oldest parents. Liquid assets were relatively flat across cohorts, while net worth declined sharply for elderly parents. Income was highest among parents aged 45–54.Conclusion These findings signal significant financial vulnerability among parents of children with developmental disabilities. Policy makers should consider targeted measures to improve the financial well-being of these parents, particularly the youngest and oldest.

A Life Course Approach to Understanding Poverty Among Older American Adults.

A relatively new strategy for studying the prevalence of poverty in America is to analyze it as a potential life course event. We use such an approach in order to examine the likelihood of both income and asset poverty for individuals between the ages of 60 and 90. Nearly half of all elderly Americans will encounter at least one year of poverty or near poverty across these ages. In addition, 58 percent of those between the ages of 60 and 84 will at some point fail to have enough liquid assets to allow them to weather an unanticipated expense or downturn in income. The policy and practice implications of these findings are discussed.

Measurement and identification of asset-poor households: a cross-national comparison of Spain and the United Kingdom

This paper is concerned with the analysis of the wealth dimension of poverty in developed countries, which cannot be measured by means of information on household income. We focus on identifying the group of households that lack enough wealth holdings to sustain them during a period of economic crisis in order to quantify asset poverty, and its demographic weight, in two industrialized countries with particularly different household demographics and saving attitudes such as Spain and the United Kingdom. Our results show that the age profile of the asset poor is remarkably similar in the two countries. In both it is individuals in households whose head is under 45 years old who are more likely to be asset poor. However, some country-specific differences also arise. For instance, the incidence of wealth poverty in the United Kingdom is about twice that of Spain. Using counterfactual analysis we find that, although the different household demographics clearly contribute importantly to this result, there remains a significant part of the asset-poverty gap which is not explained by this relevant factor.

Poverty Status and the Impact of Formal Credit on Technology Use and Wellbeing among Ethiopian Smallholders

This paper examines the impact of formal credit (largely microfinance) on the use of improved technology and on consumption and asset growth across households in different degrees of asset poverty. Using data from rural Ethiopia, the analysis finds no relationship between participation in microfinance programs and the use of technologies or consumption growth among the poorest households even though the use of certain technologies, like fertilizer, contributes to their asset accumulation over time. For other households, microfinance has positive effects on both consumption and asset growth as well as on the use of improved technology. The findings imply variation in constraints faced by different classes of poor households and suggest the value of asset-based poverty classifications in identifying target groups for poverty interventions.

Measuring the Economic Racial Divide Across the Course of American Lives

This article examines the racial divide in America with respect to three key aspects of economic well-being across the life course: (1) the likelihood of attaining affluence and avoiding poverty; (2) the probability of owning a home and acquiring significant levels of financial equity; and (3) the likelihood of possessing enough assets to protect oneself through a spell of economic turmoil. The Panel Study of Income Dynamics data set is used to construct a series of life tables that provide adulthood estimates into the occurrence of these events. The results indicate that within each area, the economic racial divide across the American life course is immense. Blacks are many times more likely than whites to experience poverty while never achieving affluence, less likely to purchase a home at an early age and build up significant levels of home equity, and more likely to experience asset poverty across the stages of the life course. The concept of cumulative advantage/disadvantage is discussed as a way of understanding the widening effect of race upon the economic trajectories of whites and blacks across the American life course.

The Income and Wealth Packages of Older Women in Cross-National Perspective

We assess the income and wealth packages of older women's (age 65+ years) households and the extent to which low income is paired with low wealth, across a group of six high-income countries. We use data on income and net worth from the Luxembourg Wealth Study, a new cross-national microdatabase. We define income poverty as having household income less than 50% of the national median and asset poverty as holding financial assets equivalent to less than 6 months of income at the poverty threshold. Older women typically have less income than do members of younger households at the national median, but their wealth holdings are generally much higher than their country's median wealth holdings. Older women's households in the United States report the highest net worth across these countries, in part because older American women have comparatively high rates of homeownership. However, American older women are also substantially more likely to be income poor. They also report high levels of asset poverty, as do women across all our comparison countries, with Sweden as a partial exception. Further research is needed to identify the most vulnerable subgroups, to integrate analyses of necessary expenditures, and to assess policy implications.

Asset Thresholds and Social Protection: A ‘Think-Piece’

al. (2003) describe the rise of social protection within the World Bank. They trace its rise at least in part to the recognition that vulnerability defines reality for many of the world's poor: Vulnerability in turn distorts and mis-shapes people's 2 It is the combination of asset poverty and inter-temporal resource allocation behaviour

Shifts in Non-Income Welfare in South Africa: 1993-2004

The aim of this study is to provide an analysis of the shifts in non-income welfare that have occurred over the period 1993 to 2004. This analysis serves as a complement to existing research which has focused on shifts in income poverty and inequality in the post-apartheid period. In addition, the study is one of only a few that provides a complete overview of the first decade of democracy by means of the comprehensive time period it covers. We use a technique called factor analysis to construct an asset index as an alternative, non-income based, measure of welfare. Variables reflecting household access to a range of services and assets are used in the construction of our asset index. An initial descriptive overview of the shifts in access to services and assets provides strong evidence that government asset and service delivery between 1993 and 2004 was pro-poor in nature. When standard measures of poverty are applied to our asset index values, statistically significant decreases in the headcount asset poverty rates between 1993 and 2004 across a range of covariates are found. A series of inequality measures are also applied to our asset index. The estimates show that across all covariates, asset inequality decreased between 1993 and 2004. Inequality decompositions indicate that within-group inequality has increased in importance in determining aggregate inequality.

Exploring poverty traps and social exclusion in South Africa using qualitative and quantitative data

Recent theoretical work hypothesises that a polarised society like South Africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty. To explore these ideas, this paper employs a mix of quantitative and qualitative methods. Novel econometric analysis of asset dynamics over the 1993–98 period identifies a dynamic asset poverty threshold that signals that large numbers of South Africans are indeed trapped without a pathway out of poverty. Qualitative analysis of this period and the period 1998–2001 more deeply examines patterns of mobility, and confirms the continuation of this pattern of limited upward mobility and a low-level poverty trap. In addition, the qualitative data permit a closer look at the specific role played by social relationships. While finding ample evidence of active social capital and networks, these are more helpful for non-poor households. For the poor, social capital at best helps stabilise livelihoods at low levels and does little to promote upward mobility. While there is thus some economic sense to sociability in South Africa, elimination of the polarised economic legacy of apartheid will ultimately require more proactive efforts to assure that households have access to a minimum bundle of assets and to the markets needed to effectively build on those assets over time.

Safety Nets or Social Insurance in the Presence of Poverty Traps? Evidence from Southern Ethiopia

Recent empirical work finds evidence of highly nonlinear wealth dynamics among the Boran pastoralists of southern Ethiopia, consistent with the hypothesis of poverty traps. We ask two critical, logically subsequent questions: (1) Do Boran pastoralists understand these dynamics? (2) If they do, what are the consequences for informal interhousehold transfers arrangements (gifts and loans of cattle)? We address these questions using original primary data collected among the same population to establish (i) pastoralists' expectations of herd dynamics and (ii) the structure of social transfers networks. Our results suggest that Borana pastoralists perceive the nonlinear dynamics that characterize livestock wealth in the region and that these result from adverse weather shocks affecting primarily households of intermediate herding ability, underscoring the criticality of methods for protecting assets in the face of unanticipated shocks. This has consequences on the design of transfer arrangements. In particular, we find that transfers of cattle respond to recipients' cattle losses, but only so long as he does not fall too far below the critical asset threshold at which herd dynamics bifurcate. Those who are persistently poor or who become destitute disappear from social networks and do not receive transfers in response to shocks. The resulting social transfers networks are highly asymmetric. These results suggest that asset transfers through social networks are better conceptualized as part of a safety net (with the objective of not letting a household falling into an asset poverty trap) than as informal mutual insurance (with the objective of providing proportional compensation for losses).

The concept and measurement of asset poverty: Levels, trends and composition for the U.S., 1983?2001

American prosperity in the second half of the 1980s together with the booming economy of the 1990s created the impression that American households have done well, particularly in terms of wealth acquisition. In this paper, we develop the concept of “asset poverty” as a measure of economic hardship, distinct from and complementary to the more commonly used concept of “income poverty.” We define a household with insufficient assets to enable it to meet basic needs (as measured by the income poverty line) for a period of three months to be asset poor. The results reveal that in the face of the large growth in overall assets in the U.S. and a fall in standard income poverty over the period from 1983 to 2001, the level of asset poverty increased from 22.4 to 24.5 percent. We also find that asset poverty rates for blacks and Hispanics are over twice those for whites; that asset poverty rates fall monotonically with both age and education; that they are much higher for renters than homeowners; and that by family type they range from a low of 5 percent for elderly couples to 71 percent for female single parents.