Poverty Transitions Research Articles

TRANSITIONS OF ASSET POVERTY AND DEPRESSIVE SYMPTOMS: A COMPARISON BETWEEN URBAN AND RURAL CHINESE OLDER ADULTS

Abstract Urban-rural disparities and asset poverty are being examined individually as critical socioeconomic factors influencing depression among older adults. However, while asset poverty, a dynamic condition evolving over the life span, is significantly influenced by urban-rural residency and household registration (hukou) status in China, the extent of their contribution to the relationship between asset poverty transitions and depressive symptoms in later life remains largely unexplored. Using four waves of the China Health and Retirement Longitudinal Study, we examined how asset poverty affects depressive symptoms among 7,982 adults aged 60 and older and the interaction effects by rural/urban areas. The fixed effect regression models revealed that older adults who transitioned from a non-asset-poor status to an asset-poor status reported elevated levels of depression compared to those who maintained a non-asset-poor status. Furthermore, significant interaction effects were found in the relationship between asset poverty and depressive symptoms. The simple slope analyses revealed that the effect of transitioning to asset poverty on depression was only significant for older adults living in rural areas or with rural hukou. The findings highlight the necessity of prioritizing policies to build a financial support system for older adults and promoting asset building to mitigate the negative impacts of asset poverty on mental well-being in later life, particularly for those in rural areas or with rural hukou. Additionally, efforts at reducing urban-rural disparities in social and family support and within the social welfare system should be advocated.

Examining Poverty Dynamics in Ghana: Evidence from Longitudinal and Repeated Cross-Sectional Data

Abstract This article examines poverty dynamics in Ghana using the Ghana Socioeconomic Panel Surveys and a synthetic panel based on the Ghana Living Standards Surveys. It provides insight into the extent of poverty mobility and persistence in Ghana, and the factors that explain poverty transitions. The results show that upward mobility has been a key feature of Ghana's poverty transitions between 2006 and 2019. However, there are still high probabilities of poverty persistence and downward mobility among initially poor and non-poor households, respectively. Furthermore, notable heterogeneities exist in poverty transitions across socioeconomic groups. Poverty is more chronic in rural areas and the northern parts of Ghana compared with urban and southern regions, respectively, and among households headed by persons from opportunity-deprived backgrounds. Other characteristics such as the number of dependants, sex, occupation and level of education of the household head are important correlates of poverty persistence and downward mobility in Ghana. Hence, addressing chronic poverty requires targeted policies that foster more inclusive and sustainable growth in rural areas and northern parts of Ghana, and improved access to opportunities for people from disadvantaged backgrounds, the unemployed, and those in vulnerable employment.

Migration, Remittance and Poverty Dynamics in Rural India: Evidence from Longitudinal Survey

As rural poverty continues to pose fundamental challenges in the development process, this study aims to examine the role of remittance in influencing poverty dynamics among rural households. For this, we employed instrumental variable technique and utilized longitudinal data of India Human Development Survey. After correcting for endogeneity bias results obtained from our econometric analysis reinforce the urgent need to focus on poverty transition in rural households and highlight the positive and significant role of the amount and frequency of remittances in alleviating poverty. Additionally, access to credit, government subsidies, and educational attainment substantially improves rural households’ economic condition and helps them to escape poverty. Education can be a magical tool to deal with poverty, so there is need to restore the quality of education in rural areas. Thus, in order to achieve poverty elimination goal, there is a need to integrate migration and poverty while considering policy measures. Given the importance of amount and frequency of remittances in poor households, it is imperative from policy perspective to focus upon the channels of smoothing the flow of external finance and make it more sustainable.

Understanding poverty dimensions and transitions in Malawi: A panel data approach

Understanding poverty dimensions and transitions in Malawi: A panel data approach

Understanding Vulnerability to Poverty, COVID-19’s Effects, and Implications for Social Protection: Insights from Ghana

The Coronavirus pandemic has created new vulnerabilities and deepened existing ones. In Ghana, the overall headcount poverty decline has disguised a large group of vulnerable households now threatened with falling back into poverty given the effects of the COVID-19 pandemic. This article draws on new household panel data to analyse transient poverty, the drivers of vulnerability before and since the COVID-19 pandemic and provides implications for social protection. Using poverty transition matrices, we first measure poverty episodes which help to not only track the movements in and out of poverty but also to identify and categorize households into distinctive groups. We then apply logistic regression to examine the determinants of vulnerability to poverty before evaluating COVID-19 vulnerabilities in the context of social protection in Ghana. We find that a large group of struggling households exist between the poor and the stable middle classes that have been overlooked by cash transfer programmes. We characterize this group and show that current vulnerability measurements and social protection design need adjustments. We also find that poverty and vulnerability to it is no longer a rural phenomenon as the transient poor since the COVID-19 pandemic are mostly located in urban areas and largely not covered by current social protection systems. Both vertical and horizontal expansion of social policy is required to reach these new groups and new locations. For reducing poverty and limiting vulnerability in developing country contexts, our findings imply that (a) new measurements and targeting may be required, (b) vulnerable informal groups in urban areas need to be included, and (c) new types of social protection for struggling households are required to prevent their falling back into poverty in the event of aggregate shocks.

Duration of poverty and Ghanaian children’s learning and executive function outcomes

This study investigated whether transitory and persistent poverty spells were associated with children’s learning (literacy and numeracy scores) and executive function outcomes in Ghana. Children resided in the Greater Accra region (N = 2,154; 49% female; Mage = 5.2 years at wave-1) and were followed at four-time points over three years. Multivariate regression models were used to test whether exposure to transitory poverty (1–2 times) or persistent poverty (3–4 times) were differentially associated with child learning and executive function outcomes at wave-4 (Mage = 7.5 years) compared to children who did not experience poverty at any wave. Our results show that transitory poverty was significantly and negatively associated with children’s literacy scores. Persistent poverty had the largest negative relations for both learning outcomes. Findings were mixed for executive function, with persistent poverty negatively related to cognitive flexibility, but not inhibitory control. Implications for global child development and learning are discussed.

Capital assets and poverty transitions in rural China

PurposeThis article aims to examine the role of capital assets in rural household poverty transitions of poverty escape and poverty descent over periods of 2014–2016 and 2016–2018.Design/methodology/approachBased on the sustainable livelihood approach, this paper uses binary logit model to explore the influence of multidimensional capital assets on poverty transitions and use instrumental variable estimation to solve the endogeneity between total net asset and poverty transitions.FindingsCapital assets have significant impacts on household poverty transitions. The role of capital assets in households' poverty escape and poverty descent are not symmetrical. The authors verify that rural households with rich total net asset are more likely to escape poverty and less likely to descend into poverty by using instrumental variable estimation. The authors verify that there is a mediation effect that total net asset can help households' escaping poverty and prevent them from falling into poverty through promoting rural households to engage in business activities.Originality/valueThis paper is the first to explore how capital assets affect poverty transitions in rural China based on the sustainable livelihood approach. The findings of this research can provide valuable policy implications for the pursuit of common prosperity in China and references for other developing countries.

The determinants of poverty exits and entries and the role of social benefits: the Italian case

This paper uses a novel micro econometric approach to analyze the impact of social benefits on the individual probabilities of poverty exit and entry in Italy, and their relative importance with respect to other socio-economic determinants of poverty transitions. Year to year transitions are defined as dichotomous variables capturing the changes of the individual poverty status, and are analyzed using random effects probit models estimated on pooled Italian data from 9 longitudinal components of IT-SILC covering the period 2004–2015. Our results show that social benefits strongly counteract the adverse effects of individual characteristics like unemployment, work intensity, inactivity, household size (and composition) and past poverty experience on the individual probabilities of poverty exit and entry. Despite their important effects on the individual probabilities of transitions, however, social benefits have a limited coverage among the vulnerable groups of the population, which strongly limits their aggregate impact on transition rates and poverty rates.

District analysis of poverty dynamics in rural South Africa

Persistent poverty is a major developmental challenge for South Africa and has multifaceted dimensions. This paper profiled and investigated poverty transitions among rural households in 22 district municipalities in South Africa. Foster-Greer-Thorbecke indices were applied to panel data from the National Income Dynamics Study from 2008 to 2017. Findings indicate that poverty levels varied across districts and poverty was most prevalent in Zululand, OR Tambo and Sisonke districts. Furthermore, districts with high poverty rates also had high poverty gap ratios. Poverty transition analyses revealed that in 82% of the districts, poverty declined between 2008 and 2017, while it increased in 13% of the districts. This transition was not mirrored between waves, with the majority of households remaining in the same poverty status between waves. The study recommends that these traditional rural districts be a major focus of poverty alleviation efforts. The role of the state in providing stability to combat poverty is encouraged through promotion of higher education. Additionally, support for agriculture as a business is also recommended. Collaborations between district municipalities and provincial departments of agriculture could facilitate this. The study adds to existing literature by providing insights from disaggregated profile and analysis of rural poverty in district municipalities.

Dynamics of multidimensional poverty and its determinants among the middle-aged and older adults in China

The aim of this study was to understand the dynamics of multidimensional poverty and its determinants among mid-aged and older adults. We used 2011, 2013, 2015, and 2018 data from the China Health and Retirement Longitudinal Study. We utilised basic descriptive statistics, the poverty transition matrix, Kaplan–Meier estimates, and the discrete-time proportional hazards model for data analysis. From 2011 to 2018, the incidence of multidimensional poverty among mid-aged and older people basically decreased, but the average poverty intensity remained stable. Most mid-aged and older adults had transient multidimensional poverty. The longer an individual remained multidimensionally poor, the smaller the probability of exit from poverty; The longer an individual remained nonpoor after escaping from poverty, the smaller the probability of returning to poverty. As to other factors, individual characteristics, family structure, living arrangements, social capital, and living areas significantly affected the risks of multidimensional poverty exit and reentry. Based on these results, the government should implement targeted interventions for frail older adults with the identified characteristics to prevent them from persistent multidimensional poverty or return to poverty.

Poverty dynamics in Nairobi's slums; Testing for state dependence and heterogeneity effects

We investigate the factors underlying poverty transitions in Nairobi’s slums focusing on whether differences in characteristics make people more prone to enter poverty and persist in, or whether past experience of poverty matters on future states. Understanding these issues is essential for the design of effective policy programs aimed at enhancing the lives of the poor. The paper uses an endogenous switching model, which accounts for initial conditions, non-random attrition, and unobserved heterogeneity.Estimations are based on a panel dataset from the Nairobi Demographic Surveillance System. Results indicate that true state dependence (TSD) constitutes the major factor driving poverty persistence. There are little heterogeneity effects. Even when household and individual observed characteristics differ notably, the TSD size remains very large. Active anti-poverty programs aimed at breaking the cycle of poverty constitute then the most appropriate policies for taking people out of poverty and preventing them to fall back in.

Chronic and Transitory Poverty in Pakistan: Evidence from a Longitudinal Household Survey

This paper analyses the incidence of chronic and transitory poverty in Pakistan in both urban and rural settings. The findings are that rural poverty is severer and also chronic as compared to transitory poverty in urban centres. The main factor behind this phenomenon is the homogeneity of the rural set-up which affects the employment and wage levels adversely. On the other hand, in the urban areas, heterogeneous population with diverse occupations provides better employment and wage opportunities. Furthermore, illiteracy, landlessness, lack of ownership of dwellings, and dependency on sharecropping are the main factors accentuating rural poverty. The paper also analyses the zakat element of the safety net strategy. Contrary to the prevailing perception that zakat does not reach the actually poor, it turns out that in fact zakat has become an “identification mark” for the chronic poor. The findings of this paper have significant implications for the poverty reduction strategy of the Government of Pakistan.

Transition of Poverty in Pakistan: Evidence from the Longitudinal Data

Interest in the dynamics of income and consumption at the household level has increased in the developing countries as measures of living conditions at a point in time are not necessarily a good indicator of its stability over time. For many purposes it is important to adopt a dynamic perspective, distinguishing between extremely, chronically or transitory poor. In Pakistan studies of poverty at a point in time provide very valuable information about its nature, characteristics and distribution. However, given the fluctuations in many dimensions of poverty such as school enrolment, nutritional status and income, these studies are unable to capture the dynamics of this phenomenon, making it impossible to analyse the factors associated with the poverty transition, i.e., movement into and out of poverty.

Chronic energy poverty in China: measurement and estimation with a new approach.

Energy poverty has multidimensional and dynamic nature and is hard to measure quantitatively. This paper combines AF double-cut-off method, and the duration analysis approach to develop both the CUEP index and CMEP index and utilizes the Cox proportional hazard model to check the role of energy efficiency in poverty alleviation. Results are based on data in the China Health and Retirement Longitudinal Study (CHARLS) from 2011 to 2018. The findings suggest that 75.887% of households are deprived of CUEP, and nearly 50% of the residents are suffering from CMEP in China. Additionally, nearly 33.546% of the households are deprived only in the dimension of affordability, and there is an obvious overlap between the incidence of two indexes, of which 42.372% of the households simultaneously suffer from deprivation in affordability, accessibility, and availability. Finally, the improvement in energy efficiency reduces the duration of energy poverty and increases the state transition of energy poverty. The presented concept and approach could be expanded to investigate energy poverty in other developing countries and assist policymakers to assess the benefits of energy policies.

Lifting You up or Dragging You Down? The Role of Financial Inclusion in Poverty Transitions Among Italian Households

We estimate the effect of financial inclusion on transition probabilities into/out of poverty. By exploiting a longitudinal sample of Italian households between 2002 and 2016, we find that financial inclusion is effective in both reducing the likelihood of entering poverty and helping the poor to climb out of it. According to our estimates, access to deposit accounts reduces the risk of falling below the poverty line by 2.7 percentage points (pp) and increases the chance of exiting poverty by 4.4 pp. Significance and magnitude of such effects are confirmed when considering different poverty thresholds and definitions, alternative proxies for financial inclusion as well as alternative empirical strategies.

Poverty Dynamics in Turkey: A Multinomial Logit Model

The availability of longitudinal data allows researchers to analyse the dynamics of poverty. By using the Turkish Statistical Institute’s (TurkStat) Income and Living Conditions Survey micro dataset, we analyse the households’ long-term monetary poverty conditions. We categorise poverty as transitory and chronic and employ the multinomial logit method to analyse determinants of each types of poverty. Results indicate that education and household size are the most effective factors for reducing transitory poverty, and for chronic poverty, the most effective factors are having a regular job and having a skilled occupation; insurance, home ownership, and number of children are important determinants for both types of poverty.

Technical efficiency and socioeconomic effects on poverty dynamics among cassava-based farming households in rural Nigeria

ABSTRACT Despite a large scale government investment to improve the livelihoods of smallholder farmers, rural poverty remains widespread in Nigeria. However, technical efficiency effects on the transitory poverty have not received much attention in the poverty literature in Nigeria due to lack of nationally representative panel data that can track the poverty status of households over time. Using a two-wave panel data between 2010 and 2015, technical efficiency and socioeconomic effects on poverty dynamics of cassava-based rural farming households in Nigeria was investigated. Results showed that 14.9% of the cassava farming households moved into poverty while 31.6% exited poverty. In the long run, the probability that rural cassava-based farmers would be non-poor (74%) was higher than those remaining in poverty. Two out of five (42.2%) cassava-based farmers who were always poor exited technical inefficiency. A large number of farmers were actively involved in mono-cropping and mixed cropping but 29.7%, 26.0% and 16.6% of those involved in mono-cropping were always poor, entered and exited poverty, respectively. Tertiary education, marital status, access to extension, farm size, membership of association, farming systems and technical efficiency were factors influencing poverty transitions in rural Nigeria.

Constructing synthetic panels for the purpose of studying poverty dynamics: A primer

AbstractWe describe a recently developed approach for constructing synthetic panels from cross‐section data and consider how it can be employed to study poverty dynamics. Initially introduced as a means to estimating upper and lower bounds on poverty transitions in the absence of panel data, further refinements to the method aim to permit as well the calculation of point estimates. We describe the assumptions that underpin the basic approach and its extensions and discuss their plausibility. We chart applications of the method in various contexts, with a view to gauging its overall validity and robustness. While proper panel‐based analysis of welfare dynamics is clearly preferable, we suggest that the method can be useful in the all‐too‐common settings where panel data are unavailable or suffer from particularly pressing quality concerns.

Covid-19 and Poverty Assessment in Nigeria – The Vulnerability Approach

The aim of the study was to abstract from the vulnerability theory to predict the likelihood of more people in Nigeria falling into the poverty trap as a result of the Covid-19 pandemic. The study used a parametric technique to obtain estimates of the mean and variance of one-period ahead log-consumption. In doing this, the study hypothesized that estimating household consumption function is important in making inferences about the future and in assessing the vulnerability of household to shocks. The simulation analysis shows that of the 82 percent of the households that are vulnerable to poverty, only about 13 percent are in transitory poverty while the rest are in structural poverty. The implication of this finding is that poverty situation in Nigeria is widespread, entrenched and inter-generational. The current coronavirus pandemic has merely worsened the poverty situation and is not the fundamental cause of poverty in Nigeria. The study recommended among others, that anti-poverty intervention measures of the government, going forward, must be forward-looking and aim largely to increase the productive capacity of the populace instead of merely aiming to alleviate their current state of poverty.

Escaping Energy Poverty: A Comparative Analysis of 17 European Countries

A comparative analysis of energy poverty transitions and persistence can provide valuable suggestions for long-term policy actions. This study examines the dynamics of energy poverty in 17 European countries based on the longitudinal household data from the EU Survey on Income and Living Conditions, waves 2015–2018. The study pursues two goals. First, we explore households’ chances of transitioning in and out of energy poverty in each country following the discrete-time Markov process. On average, the probability to stay in energy poverty is 51.5%, and there is a lot of heterogeneity across countries. Households in Bulgaria, Greece, Romania, and Lithuania are quite close to the energy poverty trap. Second, we identify factors that help energy-poor households leave energy poverty. Demographic, technical, and socio-economic factors are the drivers in escaping energy poverty, which suggests common EU policy.