Poverty Transitions Research Articles

Urban poverty and labor market dynamics in five Latin American countries: 2003–2008

Latin America experienced a long period of sustained growth since 2003 that positively impacted social and labor market indicators, including poverty. This paper contributes to the understanding of this process as it carries out a comparative study of poverty dynamics in five Latin American countries during 2003–2008. It analyzes the extent to which countries with different levels of poverty incidence diverge in terms of poverty exit and entry rates, identifies the relative importance of the frequency and impact of events associated to poverty transitions and examines how these events affect households with different characteristics. For this, a dynamic analysis of panel data is carried out using regular household surveys. Sizeable rates of poverty movements were observed in all five countries and it was found that a large proportion of household experienced positive events, mainly related to the labor market; however, only a small fraction of them actually exited poverty. Demographic events and public cash transfers proved to be of little relevance; in particular, the latter did not contribute much either to intensify poverty exits or to prevent poverty entries. Households with children experienced more (less) negative (positive) events than those without children. It appeared therefore that even when the economy behaved reasonably well at the aggregate level, high levels of labor turnover and income mobility (even of a negative nature) still prevail, mainly associated to the high level of precariousness and the undeveloped system of social protection that characterize the studied countries.

Understanding poverty persistence in Spain

The aim of this paper is to study the mechanisms behind poverty persistence in Spain. We examine the importance of past poverty experiences for explaining current poverty as opposed to observed and unobserved individual heterogeneity. Our results are based on the model proposed by Cappellari and Jenkins (J Appl Econometr 19:593–610, 2004a) that estimates poverty transitions while simultaneously controlling for attrition and initial conditions. We find that about 50% of aggregate state dependence is genuine: poverty in a given year increases in itself the chances of experiencing poverty again in the future. The remainder is explained, among other characteristics, by living with a head of household who has no educational qualifications, being an immigrant or cohabiting with teenagers. Our findings call for a comprehensive and coordinated strategy against poverty that should focus equally on income-support policies and on enhancing those characteristics that best protect against economic hardship. From a methodological point of view, we learn that unobservables affecting initial conditions and sample retention are exogenous to those related to poverty transience. However, results prove to be sensitive to the choice of poverty line.

A Study on Factors Affecting Workable Youth's Poverty Transition -Focused on Employment Stability and Employment Status-

A Study on Factors Affecting Workable Youth's Poverty Transition -Focused on Employment Stability and Employment Status-

Poverty Transitions in Italy

In this paper we investigate the determinants of poverty transitions in Italy, using the EU-SILC panel survey (2007-2010). Our findings show that education and employment play a key role in preventing poverty, and ease poverty exits. Moreover, the presence of children and a new birth hamper household poverty exits. However, poverty transitions are also state-dependent, influenced by previous poverty experience: those who have already been in poverty are less likely to exit, and more likely to re-enter poverty.

EVALUATION OF CONTINGENT REPAYMENTS IN MICROFINANCE: EVIDENCE FROM A NATURAL DISASTER IN BANGLADESH

Frequent and strictly scheduled repayments and savings in microfinance often deteriorate the liquidity of members in the face of negative shocks. Previous articles suggest the introduction of a contingent repayment system that allows such members to be rescheduled, but the unavailability of a suitable dataset makes it difficult to examine how it would actually work. This study is one of the first to evaluate the impact of this repayment system on household livelihood. In employing a unique dataset from Bangladesh, I show that rescheduling reduces the possibility of binding credit constraints and borrowing from moneylenders, and may also reduce transitory poverty. However, short-term rescheduling has insignificant effects. Indebted members with less liquid assets are more likely to be rescheduled.

Rural Poverty Dynamics in Kenya: Structural Declines and Stochastic Escapes

We use panel survey data and household event-histories to explore patterns of rural poverty dynamics in Kenya over the period 2000–2009. We find substantial mobility across poverty categories using economic transition matrices. Drawing on asset-based approaches, we distinguish stochastic from structural poverty transitions. Few households successfully escaped poverty through asset accumulation (up to 35% of the upwardly mobile), while a large proportion of households (up to 66%) declining into poverty experienced structural transitions. Using household event-histories, we find significant differences across structural poverty transition classes in livelihood strategies, household-level shocks, and other factors.

Poverty Transitions among Older Households in Brazil and South Africa

Using a panel data set of older people and their households in Brazil and South Africa, the article provides estimates of changes in the poverty status transitions of older people and their households over time, assessing the extent to which some panel households managed to escape from poverty, while others fell into poverty, and others remained persistently poor or persistently non-poor. It also provides an exploratory analysis of the factors associated with poverty transitions. The article finds that mean improvements in well-being among older households net out significant transitions into, and out of, poverty. A l’aide de donnees de panel de menages âges au Bresil et en Afrique du Sud, cet article evalue l’evolution dans le temps de la transition du statut de pauvrete des personnes âgees et de leurs menages. Nous evaluons en particulier dans quelle mesure certains menages sont parvenus a sortir de la pauvrete, alors que d’autres se sont appauvris, et d’autres encore restent pauvre ou non pauvre de maniere persistante. Nous effectuons egalement une analyse exploratoire des facteurs associes avec ces processus de transitions. Nous constatons que les ameliorations moyennes du bien etre des menages âges peuvent induire des entrees tant que des sorties de la pauvrete.

Poverty Dynamics in Clusters of European Union Countries: Related Events and Main Determinants

So far the dynamics of income poverty in European countries has been analysed in a comparative perspective using the ECHP dataset, the first EU-scale panel survey ran from 1994 to 2001 in the “old” 15 member states. By means of the EU-SILC longitudinal data, the main purpose of this paper is to up-to-date such kind of analysis up to 2007 and to extend it including also the “new” EU member states. Being the time span covered by EU-SILC too short for carrying out survival analysis on poverty duration and recurrence, in this paper we focus on income poverty mobility only, identifying and analysing which are the main determinants associated to households’ fall into or exit from poverty. Analyses are carried out grouping EU countries in the five usual geographical clusters. The results show that events related to the labour market are the most important in all clusters both because of their frequency and their relevant impact on poverty transitions Demographic events are, on the contrary, everywhere, much less relevant.

Persistent Poverty in the Netherlands, Germany and the UK

Using panel data for the Netherlands, Germany and the UK for seven years in the late 1980s and early 1990s the paper examines the comparative evidence on longitudinal income and persistent poverty for the three countries. Elaborating on the existing methodological literature of income dynamics, a panel regression model has been estimated to arrive at population wide estimates of the population in persitent and transitory poverty in a comparative perspective. What the model actually pursues is to disentangle income over time in a permanent and transitory part. The idea behind the approach is that what really matters for people’s welfare in the long run is their permanentincome. The basic assumption is that people have a kind of latent long-term income-toneeds level from which occasional departures are possible due to temporary income shortfalls or income surpluses associated with the occurrence of events such as(un)employment, disability or illness, overtime work or working time reductions. According to this framework, poverty can be seen as a state in which permanent income falls below a predefined threshold being the long-term poverty line. The approach can therefore be helpful in estimating the size of the population in persistent poverty. When appropriate variables are added to the empirical model, it is possible to monitor the effect of socio-economic events on the permanent income-to-needs level. Following Esping-Andersen’s seminal work on welfare-state regimes, one might perceive the UK as a liberal welfare state although in a less prototypical sense as it exists in the US. Germany should clearly be considered to belong to the corporatist prototype and the Netherlands to the social-democratic type. Then, presumably, the UK has the lowest permanent income-to-needs level, the highest persistent poverty incidence and the highest income mobility. The findings confirm the presumption that permanent income is lower in a liberal welfare state as the UK although not very much lower than in the other countries. Hence, the transitory part of income is slightly larger in this liberal type of welfare state. The results also show that permanent income is more unequally distributed in the UK than in the Netherlands and Germany and that income inequalities have a less permanent character in the Netherlands. Besides, transitory shocks in income have a less permanent effect in the Netherlands than in the two other countries. The inclusion of household composition or labour market variables does not alter the main results. Viewing the effect of labour market status variables, like living in a household with a not working head, it is shown that members of these households are more likely persistent poor, particularly when the head is female. The effects of household structure on persistent poverty appear quite large. Especially, lone-parents households seem prone to persistent poverty in all three welfare regimes but single elderly particularly in the UK.

Evaluating poverty duration and transition: a spell-approach to rural China

This article uses a discrete-time multivariate duration model to study poverty transition in rural China between 1989 and 2006. The analysis identifies nonlinear negative duration-dependence for both exit and re-entry rates of poverty. There is significant difference in hazard rates of exit and re-entry associated with geographic location and educational level of households, but less related to gender, occupation or ethnic background of household head. The factors facilitating households' ending a poverty spell are found to be education, land ownership, asset accumulation, health insurance and outmigration, whereas larger family size and dependence ratio may reduce the chance of exit.

시소와그네 교육중재 프로그램이 저소득가정 유아의 적응행동에 미치는 영향

The purpose of this study was to examine the effects of the Seesaw & Swing Early Intervention Program on the positive changes of young children from low-income families. The Seesaw & Swing program was developed by the Community Chest of Korea (Hwang et al., 2009). The subjects for this study consisted of 534 3~6-year olds (177 in the service group, 357 in the control group) from low-income families. The instrument used was the Vineland Adaptive Behavior Scales, second edition (Sparrow, Cicchetti, & Balla, 2005). The results of this study indicated that the Seesaw & Swing intervention program produced positive effects in all of the domain areas under examination : namely, the communication abilities, life skills, socialization, physical development, and adaptive behaviors of young children. In conclusion, the Seesaw & Swing Early Intervention Program for young children from low-income families can be said to be an effective early intervention program which goes some way towards ending the intergenerational transition of poverty in Korea.

WHY ARE CHILD POVERTY RATES SO PERSISTENTLY HIGH IN SPAIN?*

Poverty rates among households with children in Spain have been shown to be persistently higher than those among households without children. These higher rates prevail for chronic, transitory and, most remarkably, for recurrent poverty. In order to study the dynamics of poverty transitions in this country we estimate a dynamic random effects probit model that controls for unobserved heterogeneity and initial conditions using the panel data information from the European Community Household Panel. Our results show differential effects of several individual and household characteristics on the probability of being poor for households with and without children. Of special interest is how labour instability factors can help in explaining the outstandingly higher recurrence in poverty among households with children observed in Spain in comparison with other countries.

Dynamics of Poverty, Labor Market and Public Policies in Latin America

Latin America experienced six years of sustained growth from 2003-2008. The high rate of economic growth over these years, before the 2008-2009 crisis, positively impacted social and labour market indicators. Evidence of these positive impacts can be seen in the form of job creation (particularly formal occupations), reduced unemployment and a slight recovery of average wages. During the period of interest, the rates of poverty and extreme poverty in the region respectively fell by 11 and 6 percentage points (p.p.). It is highly pertinent, in this context, to study the dynamics of poverty in the region and to analyze the flows into and out of poverty that accompanied this significant reduction in poverty.The main objective of this paper is to carry out a comparative study of poverty dynamics in five Latin American countries. The study specifically aims to analyze the extent to which countries with various levels of poverty incidence differ in terms of the intensity of poverty exits and entries, identify the relative importance of events associated with poverty transitions (such as factors in the labour market, demographic change and public policy), and finally, this study aims to examine the ways in which these events affect households with different characteristics.In order to achieve these objectives, we perform a dynamic analysis of panel data from regular household surveys. Of the five countries included in the study, Argentina and Costa Rica are found to have a relatively low incidence of poverty, Brazil is in an intermediary situation in this regard, while relatively high rates of poverty are found in Ecuador and Peru. This heterogeneous selection gives us a varied picture of social deprivation in the region.This dynamic analysis is useful for policy recommendations to overcome high poverty levels in the region, both by reducing the probability of falling into poverty and increasing the chances of moving out of poverty.

위스타트(We Start) 가정방문 교육중재 프로그램이 저소득가정 영아의 발달에 미치는 영향

The purpose of this study was to examine the effects of We Start home visiting intervention program on the positive changes of infants and their low-income families. The subjects were 171 18∼36-month olds and their mothers living in We Start and non We Start areas. The instruments used were Developmental Profile, CleminshawGuidubaldi Parent Satisfaction Scale(CGPSS) and Home Observation for Measurement of the Environment(HOME). The results were as follows: First, the result of Developmental Profile showed positive changes in all domains(physical development, self-help skills, social development, cognitive development, and communication ability). Second, the result of CGPSS showed positive effects on parent-child relationships. Third, the result of HOME showed positive effects on mothers’ emotional and language responses. In conclusion, We Start home visiting program for infants from low-income families is an effective early intervention program to end intergenerational transition of poverty in Korea. 주제어(Key Words) :위스타트(We Start), 가정방문(home visiting), 중재프로그램(intervention program), 저소 득가정(low-income family) 목 차

What determines poverty transition? An investigation of women livestock farmers in Bangladesh

This article evaluates poverty transition using self-assessment in a quasi-experimental framework. Data are drawn from a survey conducted in 2006 of 400 women who were the beneficiaries of a poverty-alleviation programme which involved longer-term interventions towards building the strength of government departments, participating organisations, and beneficiaries. During the survey, when the project was approaching its conclusion, about 50 per cent of these farmers were still in the programme. The article addresses a number of key questions related to pathways out of poverty through livestock-based activities, heterogeneity in livelihood choice and its impact on household welfare, and wider applications.

Cooperatives and Community Development: A Perspective on the Use of Cooperatives in Development

Community developers have long understood the importance of local participation in the events and processes that shape communities. Effective, democratic, and people-and-place-centered development strategies have the potential to achieve such participation. This article suggests that cooperatives can be an effective participatory strategy to bootstrap low-income people into the socio-economic mainstream. Woolcock and Narayan's (2000) social capital and poverty transition model is adapted to demonstrate the development potential of cooperative businesses. We hope to stimulate discussion among community development scholars and practitioners, policymakers, and the public on the potential of cooperative business as a community development strategy, particularly in resource limited communities.

Poverty Traps and Structural Poverty in South Africa: Reassessing the Evidence from Kwazulu-Natal

Using three waves of the KwaZulu-Natal Income Dynamics Study (KIDS), panel data collected in South Africa’s most populous province between 1993 and 2004, this paper re-investigates patterns of chronic and structural poverty previously identified from the first two waves. The 2004 wave collected information from 867 households containing core members from 760 households first contacted in 1993. We find that the initial increase in poverty rates has been reversed from an increase between 1993 and 1998 from 52 percent to 57 percent, to a decline to 47 percent. Using asset-based approaches to identify potential poverty traps, our results confirm our previous finding with approximately 30 percent of the KIDS households found to be structurally poor over the eleven year period of the survey, 30 percent structurally never poor, 9 percent structural upward and 7 percent were structurally downward. The remaining 24 percent are in transitory poverty in that the changes in their poverty status arise from either short-term windfalls or shocks, or from measurement error. Seeking an explanation for the persistence of poverty, the only poverty trap for which we find clear evidence when using all three waves is that of low initial education.

Study of the Incidence and Nature of Chronic Poverty and Development Policy in South Africa: An Overview

The purpose of this study is fourfold: first, to summarise the current state of knowledge about chronic poverty in South Africa; second, to describe the range of existing governmental and civil society initiatives which address chronic poverty; third, to identify challenges to addressing chronic poverty in South Africa; and fourth, to identify themes for further research. The introduction to the paper is followed by a brief survey of the historical background, current economic context and poverty profile of South Africa. The paper then presents a quantitative and qualitative picture of South Africa's chronically poor. To date, there has been only one data set collected in South Africa allowing an inter-temporal comparison among the same households. This is the KwaZulu-Natal Income Dynamics Study (KIDS), covering one of the provinces rather than the whole country. Because this data set and the analyses based upon it are unique, we discuss them at length. The KIDS data suggest that at least half of households that are poor are chronically poor; that 'ultra-poverty' is not synonymous with chronic poverty; and the there is a large degree of employment volatility experienced by households. The KIDS-based studies as well as other poverty analyses allow identification of groups especially likely to be chronically poor. These include rural households, women-headed households, households effectively headed by elderly people, and former (retrenched) farm workers. Over the next 10 years, however, AIDS orphans and households directly affected by AIDS, will likely figure as the most prominent category of people mired in chronic poverty. The paper goes on to survey the variety of anti-poverty measures of government and civil society. Measured by expenditure, the government's social security system is by far the largest anti-poverty instrument in the country, and probably one of the more functional. The paper suggests that a number of challenges face government and civil society to address poverty in general and chronic poverty in particular. Among these are: first, the absence of a coherent anti-poverty strategy, and particularly one that takes into account the distinction between chronic poverty and transitory poverty; second, the bleak prospects for growth in formal sector employment over the medium terms, together with general uncertainty about how to improve support to the SMME sector; and third, the HIV/AIDS epidemic, the effects of which will likely be far more apparent in the next 15 years than to date. The paper concludes with suggested priority areas for further research.

Severe Poverty and Growth: A Macro-Micro Analysis

The first section of this paper reviews the relationship of growth performance, by country and region, to various definitions of poverty and in particular to severe poverty. The second section examines the same question of the varying growth-elasticity of poverty through a micro, case-study lens. Initially it looks at the outliers - those country cases where growth was, and was not, associated with an improvement in the welfare of the poorest. Then it focuses more sharply on specific countries: at this stage, Uganda, where the macro-poverty elasticity was 'orthodox' , and Bolivia, where it was perverse. Within these 'focus countries', the approach is two-part:(i) an examination of the relationship between chronic poverty and growth over the last five to seven years, and how institutions and policies have impinged on this; and (ii) within specific localities, depth interviews with people who have exited and failed to exit from chronic poverty, with a view to understanding what combination of policy, institutional and other factors, in their view and that of other key informants, are responsible for this difference in outcomes. This approach enables us to examine more thoroughly than at macro-level the attitudes and causal processes which are associated with escape and non-escape from poverty. Three themes from the macro-analysis resurface here: (i) the key importance of deepening labour markets in the process of exit from severe poverty - for many of the chronically poor, casual labour income is the only income they have. (ii) The importance of reducing the risks to which the severely poor are exposed. (iii) the importance of smallholder agricultural growth, and services which facilitate this, in sustaining the poverty elasticity. However, we are also able to identify other 'more micro' factors which are associated with the probability of poverty transitions and thence with the poverty elasticity: (iv) At the micro-level, resilience and perseverance in face of adversity are key determinants of exit from poverty. By extension, the availability of facilities which will encourage those afflicted to persevere rather than give up and retreat into subsistence is highly relevant. (v) The importance of complementarities between policies and institutions as means of achieving sustainable exit from extreme poverty. (vi) The potential political importance of 'watching the right poverty indicators'. In short, in many regions and countries, 'growth is not nearly enough' to reduce severe poverty, and this fact has political significance, but we know something about the policy and institutional factors which may enable exit from such poverty. These include appropriate risk-reduction institutions, labour market deepening, agricultural intensification (particularly in Africa), the availability of support networks, and a pro-poor pattern of public expenditure.

Poverty Transitions Among Older Households in Brazil and South Africa

Using a panel data set of older people and their households in Brazil and South Africa, the article provides estimates of changes in the poverty status transitions of older people and their households over time, assessing the extent to which some panel households managed to escape from poverty, while others fell into poverty, and others remained persistently poor or persistently non-poor. It also provides an exploratory analysis of the factors associated with poverty transitions. The article finds that mean improvements in well-being among older households net out significant transitions into, and out of, povertyA l’aide de donnees de panel de menages âges au Bresil et en Afrique du Sud, cet article evalue l’evolution dans le temps de la transition du statut de pauvrete des personnes âgees et de leurs menages. Nous evaluons en particulier dans quelle mesure certains menages sont parvenus a sortir de la pauvrete, alors que d’autres se sont appauvris, et d’autres encore restent pauvre ou non pauvre de maniere persistante. Nous effectuons egalement une analyse exploratoire des facteurs associes avec ces processus de transitions. Nous constatons que les ameliorations moyennes du bien etre des menages âges peuvent induire des entrees tant que des sorties de la pauvrete.