Poverty Trap Research Articles

A Case Study of Farmers’ Behavioral Motivation Mechanisms to Crack the Fractal Multidimensional Relative Poverty Trap in Shaanxi, China

China’s approach to addressing rural poverty has evolved from a thorough resolution of absolute poverty to a focus on providing essential support for vulnerable individuals and improving the income and welfare conditions of those who are relatively poor, taking into account multiple dimensions. This study utilizes a dataset consisting of 526 research sets collected from the central region of Shaanxi Province. The research employs structural equation modeling to examine the fractal multidimensional relative poverty trap experienced by farm households. Additionally, the study investigates the behavior motivation mechanism that can potentially alleviate the multidimensional relative poverty trap at the farm household level. The study found that (1) farm households in the central Shaanxi region are caught in a multidimensional relative poverty trap, with education poverty and health poverty having a conduction and amplification effect; health poverty and education poverty amplify employment poverty; and consumption poverty amplifies education poverty and health poverty, and education poverty further amplifies information poverty. (2) Multidimensional relative poverty in farming households creates a self-reinforcing poverty trap, and community relative poverty amplifies the multidimensional poverty trap in farming households. (3) Farmers can overcome the multidimensional relative poverty trap through the behavior motivation mechanism.

The Impact of the Digital Economy on Transformation and Upgrading of Industrial Structure: A Perspective Based on the “Poverty Trap”

Breaking the “poverty trap” has gradually become the core topic of economic research. The transformation and upgrading of industrial structure is considered an essential means to break the “poverty trap”. How to use the digital economy effect to change the allocation of capital and labor factors and realize the transformation and upgrading of industrial structure is a significant issue in this paper. The study focuses on examining the development of China’s digital economy between 2013 and 2021, uses the entropy method to measure it, and conducts an empirical study through a fixed-effects model and an intermediary-effect model to investigate the influence and mechanism of the digital economy on industrial structure transformation and upgrading. The results indicate the following: Firstly, the digital economy plays a crucial role in facilitating the transformation and upgrading of industrial structure, and this conclusion was still robust even after controlling for a series of factors affecting the transformation and upgrading of industrial structure and correcting the endogenous estimation deviation by using instrumental variables. Secondly, through the heterogeneity analysis of regions with different economic development levels, it was found that compared with economically developed regions, economically backward regions need to pay more attention to the development of the digital economy. Thirdly, the examination of the mechanism revealed that the digital economy has realized the transformation and upgrading of industrial structure by optimizing the allocation of capital and labor. In this paper, Schumpeter’s innovation theory is regarded as a new perspective to break the “poverty trap” and realize the transformation and upgrading of industrial structure, filling the gap in related research in this field. This study provides a suggestion for economically backward areas to break the “poverty trap” and provides theoretical support and practical guidance for the sustained economic growth of the whole country.

Abundant Nature and Poverty Trap: The Irony of Fishermen in Percut, North Sumatra

Abundant Nature and Poverty Trap: The Irony of Fishermen in Percut, North Sumatra

Manajemen Pemberdayaan Zakat dan Implikasinya terhadap Aspek Sosio Ekonomi dalam Kesejahtraan Umat

The welfare of the people in the Islamic perspective includes material, moral, and spiritual welfare. This view is in line with human nature which is holistic in nature which has implications for the socio-economic system of society which cannot be separated from all Islamic teachings in an integral and comprehensive manner. To realize this welfare, efforts are needed, one of which is through empowerment and professional zakat management. Through professional management, zakat is a potential source of funds that can be used to achieve general welfare for the whole community in Indonesia. Good and professional zakat management using modern management principles is expected to increase the dignity of the Islamic community from underprivileged conditions, as well as escape the trap of poverty and economic backwardness. Management of zakat empowerment can be manifested as well-organized zakat management activities which consist of planning, organizing, implementing, and controlling or supervising carried out to achieve the goal of utilizing the potential of zakat that has not been maximized in Indonesia through the utilization of human resources and other resources which ultimately have an impact on the socio-economic aspects of the welfare of the people.

Analysis and Enlightenment of the Reasons for Why China Can Get Rid of the Poverty Trap

In 2020, China successfully won the Tough Battle Against Poverty, and eliminated all absolute poverty in the society. China becomes the first developing country that completes the poverty reduction goal of the United Nations Millennium Development Goals, and makes great contributions to the world poverty reduction. Most importantly, China escaped the Poverty Trap. According to the comparison between China and other countries that fall into the Poverty Trap, it is found that the environment for technological development, the potential economic growth, and the role of becoming the fourth "world factory" and the fourth international industrial transfer are all one of the factors that China can get out of the Poverty Trap. These factors ensure that Chinese economy can grow rapidly and also explain why China can avoid the Poverty Trap. Therefore, China should continue to vigorously develop its economy and technology to prevent poor households from returning to poverty and eliminate relatively poor populations.

Effects of N-Power Programme on Poverty Reduction and Unemployment in Nigeria: Evidence From Data

The effects of the N-power programme on poverty reduction and unemployment in Nigeria are investigated in this paper. Secondary data from 2004 to 2021 were employed but in comparison of two periods. Charts, Graph, Tables and Student t-test developed by Fisher were employed in analyzing the data. The result from the stylized facts revealed that there was an insignificant reduction in poverty rates as poverty rates during N-power average 41.26% and fluctuate within the six years of implementation of the programme. The p-value of 0.1748 which is higher than 0.05 confirmed that there is no statistical significant difference between poverty reductions in the two periods. The result also shows that N-power programme has not been effective in curbing unemployment as the rate of unemployment keeps increasing in the country. For N-Power to be effective in curbing poverty and unemployment, this paper recommends that government should have a transitional plan for beneficiaries, for the programme to a long term employment. This can be achieved by creating employment opportunities for beneficiaries within the ministries and agencies of governments, and encouraging the private sector to absorb the beneficiaries after some periods of training. Beneficiaries can also be given interest-free loans and mentorship to start their own small businesses and to employ others. Where this is not possible within the stipulated period, beneficiaries of the N-power should be made to stay on the programme until they find paid employment rather than lay them off to the labour market after two years without adequate plan to keep them off the poverty trap.

Women and The Poverty Trap (Study on The South Merapi Slope)

The infection rate of COVID-19 has forced many households into economic hardship when poverty strikes, women are the most affected. In rural areas, the beginning of the poverty trap is economic difficulties in addition to reduced arable land. The research was conducted in Girikerto Kapanewon Turi District, women in the research areas experience increasingly complicated poverty traps. This study aims to find out the social conditions and economic conditions of women during COVID-19, the second objective is to find out the efforts made by women to escape from household poverty during the COVID-19 pandemic, and third to find out how women find alternative social and economic activities during COVID-19. To examine primary and secondary data related to demographics, descriptive quantitative data analysis is essential. Frequency tables are utilized to describe the distribution and pattern of features of particular variables. The demographic characteristics of women in the research region are dominated by their productive age, high school/vocational education, their status as housewives, and their employment in agriculture. The result show women can still meet their food needs from their limited agricultural land. The poverty trap experienced by women is the difficulty in fulfilling household needs other than food such as the cost of educating children, the health of household members, and transportation. Women manage household finances by tightening the fulfillment of household needs, even women have to sacrifice setting aside the fulfillment of their own needs in order to meet the minimum household needs. Women to get out of the poverty trap take advantage of social relations, family ties, and government assistance, even when women have access to look for alternative income, women try to find additional income by working modestly.
 Keywords : Women; poverty trap; south merapi slope
 
 Copyright (c) 2023 Geosfera Indonesia and Department of Geography Education, University of Jember
 This work is licensed under a Creative Commons Attribution-Share A like 4.0 International License

The impact of disability-related deprivation on employment opportunity at the neighborhood level: does family socioeconomic status matter?

Difficulties in attaining employment significantly contribute to socioeconomic poverty among individuals with disabilities. However, our understanding of how socioeconomic deprivation experienced by individuals and families with disabilities influences employment opportunities remains incomplete. This study aims to explore the relationship between index of disability-related multiple deprivation (IDMD) and employment opportunities (EMPO), while also investigating the role of family socioeconomic status (FSES) in shaping this relation. This study explores the heterogeneous effects of IDMD, FSES, and the interaction between IDMD*FSES on EMPO among four disabled population groups categorized by IDMD and FSES. Results reveal that IDMD has a significant negative impact on EMPO, suggesting that persons with disabilities are confronted with a poverty trap resulting from the relationship between IDMD and EMPO. Furthermore, FSES demonstrates an effective moderating role in the IDMD-EMPO relationship, with the greatest impact observed among disabled population groups characterized by high IDMD and low FSES. The findings suggest that family-level support is crucial for vulnerable groups of disabled individuals to overcome the poverty trap, surpassing the reliance on individual-level assistance alone. This study supports a paradigm shift in comprehending disability-related deprivation by acknowledging its association with families, thereby presenting opportunities to enhance the welfare of people with disabilities.

Escape poverty trap with trust? An experimental study

Escape poverty trap with trust? An experimental study

Asymmetric new Keynesian Phillips curve for Mexico, 2005Q1–2022Q4

PurposeThe labor market responds in a differentiated manner during recessions and expansions, and it is of vital importance to know the magnitude asymmetries. The purpose of this paper is to evaluate the effects of the disinflationary monetary policy (2005Q1–2022Q4) through the sacrifice rate measured in terms of unemployment and rate of critical labor conditions (RCLC) with nonlinear auto regressive distributed lag (NLARDL; Shin et al., 2014), which allows to efficiently estimate asymmetric effects in short and long terms in the presence of variables of different integration orders.Design/methodology/approachThe authors estimate an asymmetric accelerationist Phillips curve, augmented with labor precariousness for Mexico (2005Q1–2022Q4) following the NLARDL approach (Shin et al., 2014).FindingsThe authors prove that the increase in the unemployment gap has greater disinflationary effects than the RCLC in both the short and the long term; the expansionary phases of the business cycle, which reduce UGap, do not have inflationary effects either in the short or in the long run, but improvements in the labor market do, when RCLC is reduced; raising RCLC appears to have been the companies’ main survival strategy since 2015; and these asymmetries can generate a low unemployment trap with high and growing precariousness, with huge dynamic costs for well-being, economic growth, inequality and poverty.Social implicationsAs labor precariousness grows, the implications are several both in the short and long run. In the short run, the most notorious example of the effects on workers has to do with unstable and insecure situations, that disrupt all their life planning options, and health issues. Bohle et al. (2004) found in the Organization for Economic Cooperation and Development countries that casual employees had less desirable and predictable working hours, greater work–life conflict and more associated health complaints than people with permanent jobs.Originality/valueThe approach includes the labor precariousness variable, which describes a new phenomenon in the labor market. Nowadays, workers are facing a new threat since firms are employing a new labor cost reduction strategy in which they do not lay off workers but rather paying them less, working them more hours, or reducing benefits. The asymmetries between the effects of precarity and unemployment can generate a poverty trap in the long run. This problem is, once again, of great relevance in the context of global high inflation.

Long-term impacts of an early childhood shock on human capital: Evidence from the 1999 economic crisis in Ecuador.

This paper provides evidence on the lasting effects of the 1999 economic crisis in Ecuador on human capital formation. We show for children born during the crisis that the negative repercussions are still observable more than 10years after macroeconomic recovery. Taking advantage of micro-level data collected in 2012 and 2014, we assess long-term impacts on health and education. After controlling for age-in-months and survey effects as well as a linear birth year-cohort trend that varies by region, we find that after 12-16years, the cohorts born during the recession report height-for-age Z-scores that are 0.003 standard deviations (SDs) lower for each month of exposure and have 0.002 fewer years of schooling per month exposed compared to the cohorts born outside the recession years. Children exposed to the entire crisis are 0.063 SDs smaller and have 0.042years less of schooling. Girls have lower health outcomes than boys. Concomitantly, we show that selective childbearing or excess infant mortality are unlikely to drive our results. The persistence of the negative effects points to the existence of a poverty trap suggesting that policy interventions in response to (economic) crizes should be extended beyond macroeconomic recovery to counteract long-term, micro-level consequences.

Effects of development aid (grants and loans) on the economic dynamics of the recipient country

This paper investigates the nexus between foreign aid (in both forms: grant and loan), poverty trap, and economic development in a recipient country by using a Solow model with two new ingredients: a development loan and a fixed cost in the production process. The presence of this fixed cost generates a poverty trap. We show that foreign aid may help the country to escape from the poverty trap and converge to a stable steady state in the long run, but only if (i) the country’s characteristics, such as saving rate, initial capital, governance quality, and productivity are good enough, (ii) the fixed cost is relatively low, and (iii) the loan rule is generous enough. We also show that our model with foreign aid has room for endogenous cycles, unlike the standard Solow model.

The ecological poverty trap: Addressing the role of structural change, economic growth, trade, capital formation and democracy

The ecological poverty trap: Addressing the role of structural change, economic growth, trade, capital formation and democracy

A network‐based economic growth model with endogenous migration and poverty traps

AbstractWe analyze a network‐based macroeconomic framework with the objective to analyze the effects that endogenous migration choices may have on the mutual relation between population dynamics and capital accumulation. In our economy population size determines the labor input which, together with the available capital stock, shapes total output. Production takes place with a convex‐concave technology allowing for a poverty trap. Migration depends on the origin‐destination income differential and affects the fertility rate. Thus population growth ultimately turns out to be endogenously dependent upon economic conditions. Such feedback effects between population and capital dynamics give rise to possible heterogeneity in the patterns of economic development, allowing to explain the large variability in the level of development between regions we generally observe at world level. We show that a higher degree of economic interaction improves economic outcomes at global level by allowing poor economies to escape their poverty trap, suggesting thus that promoting the formation of tight relations between countries may be an important policy option to favor economic development.

The Spatial Mismatch between Tourism Resources and Economic Development in Mountainous Cities Impacted by Limited Highway Accessibility: A Typical Case Study of Lhasa City, Tibet Autonomous Region, China

We studied the misalignment between tourism resources and economic development in mountainous cities in the context of limited highway network accessibility. Using Lhasa City as a case study, we illustrated how to evaluate tourism resources and economic development and how to improve tourism resources and promote economic development. The tourism resources possessed by tourism destinations are prerequisites for tourism activities. This study focuses on the coupling coordination relationship between the degree of superiority in tourism resources and the level of economic development in Lhasa City. Data from Lhasa City in 2010, 2015, and 2020 were compared to explore a way of optimizing the spatial pattern of tourism development. The results of this study are as follows. (1) As a typical mountainous area on the Qinghai–Tibet Plateau, the accessibility of Lhasa’s mountainous area largely influences the choice of tourist destinations and is also an important indicator for evaluating the degree of tourism resource superiority. (2) On the whole, the economic development of Lhasa City and the degree of tourism resource superiority is not coordinated, mainly in the low coupling coordination stage, and with the passage of time, the degree of coupling coordination gradually becomes weaker. (3) If a town has advantageous tourism resources with slow economic development, it is easy to fall into the “resource curse” dilemma. In addition, if a town has poor tourism resources, it will be reduced to an outflow area of population and resources after leaving the investment drive, and easy to fall into the dilemma of the “poverty trap”.

How does energy poverty eradication realize the path to carbon unlocking? The case of China

The energy poverty (EP) trap empowers policymakers to confront urgent issues related to energy, which also gives them the opportunity to deal with the dilemma of carbon lock-in (CLI). Based on provincial-level data in China during 2002–2017 and by employing the Instrumental Variable-Generalized Method of Moments (IV-GMM) estimation model, we empirically examine the direct impact of EP on CLI, as well as the asymmetric effects on CLI from EP. This paper also documents the moderating and mediating effects of the EP-CLI nexus. We find that (1) EP significantly leads to a higher level of CLI, and their positive relationship means that alleviating EP is essential for cutting CLI. A rise of 1% in EP results in a corresponding increase of 0.1680% in CLI.; (2) EP shows a more obvious positive influence on CLI in areas with a lower level of CLI; (3) renewable energy technology innovation shows a moderating role and helps to reduce the positive impact of EP on CLI, which means the synergic effect of EP and technological innovation reduces the externalities of EP on CLI; (4) EP directly influences CLI by restraining carbon efficiency by encouraging the use of transitional fossil fuels and inhibiting energy consumption transition. EP also directly exacerbates the CLI dilemma. Therefore, we propose some suggestions for policymakers to address the trap of EP and cope with the dilemma of CLI.

Housing Supply and How It Is Related to Social Inequalities—Air Pollution, Green Spaces, Crime Levels, and Poor Areas—In Catalonia

We carried out a search of over 12,000 houses offered on the rental market in Catalonia and assessed the possibility of families below the poverty threshold being able to rent these homes. In this regard, we wanted to evaluate whether the economic situation of families is able to influence their social environment, surroundings, and safety. We observed how their economic situation can allow families the possibility of developing a life without exposure to health risks, and how economic constraints result in disadvantages in several areas of life. The results show how families at risk of poverty live in less favourable conditions and experience a widening of different gaps, with current prices leading to a possible poverty trap for the most disadvantaged groups. The higher the percentage of the population below the threshold, the lower the possibility of not being able to rent a house compared to areas with a lower prevalence of population below the threshold. This association was observed both when considering the risk linearly and non-linearly. Linearly, the probability of not renting a house was reduced by 8.36% for each 1% increase in the prevalence of population at risk of extreme poverty. In the second, third and fourth percentage quartiles, the probability of not being able to rent a house decreased by 21.13%, 48.61%, and 57.79%, respectively. In addition, the effect was different inside and outside of metropolitan areas, with the former showing a decrease of 19.05% in the probability of renting a house, whereas outside metropolitan areas the probability increased by 5.70%.

Reducing farmers' poverty vulnerability in China: The role of digital financial inclusion

AbstractThis paper applies exogenous shocks to investigate the impact of digital financial inclusion (DFI) on farmers' poverty vulnerability in China. We find that farmers in highly developed DFI areas are less vulnerable to the poverty trap. The result is robust to various checks, including propensity score matching and difference‐in‐differences method and the instrumental variable approach. Moreover, we find that income diversification is the possible economic channel through which DFI affects farmers' poverty vulnerability. Further analyses show that DFI has a “targeting” effect on those who are poor and vulnerable, and a synergistic effect by working with medical insurance and informal finance in terms of reducing farmers' poverty vulnerability. Our research findings provide new theoretical insights and useful guidance in enhancing financial inclusiveness and sustainable development in the post‐COVID‐19 era.

Rural Agriculture and Poverty Trap: Can Climate-Smart Innovations Provide Breakeven Solutions to Smallholder Farmers?

Agriculture is widely recognized as a solution to food insecurity and poverty, especially in rural areas. However, 75% of the world’s poor live in rural areas, and agriculture is the primary source of their livelihood. One may wonder if the observed correlation between agriculture and poverty also suggests causation. If that is the case, then what such causal relationship might exist? Is agriculture a vehicle for poverty alleviation or a source of poverty trap? The role of climate change is rather undisputed: associated extreme weather phenomena cause severe negative impacts on agriculture, exacerbating rural poverty. However, climate-smart agriculture (CSA) is acclaimed to potentially reverse the situation by eliminating poverty and food insecurity. Against this backdrop, the paper investigates whether smallholder farmers who adopt CSA could achieve food security and better income. This aim was approached through three key research objectives (i) to examine the effects of climate change on smallholder farmers, (ii) to examine the extent to which smallholder farmers adopt CSA and the barriers to adoption, and (iii) to investigate empirically the effects of CSA practices in terms of food security and poverty alleviation. The Upper West and Upper East regions in Ghana were selected purposively for the case study, and the data collected were analyzed using inferential and descriptive techniques. The results revealed no statistically significant positive relationship between the adoption of CSA with food security and income. Poor socioeconomic and market conditions marred the expected positive effects of CSA, hence the need for the provision of agricultural infrastructures and inputs as well as the creation of market for commodities.

Pollution havens and agglomeration: The effect of globalization and technological spillover

ABSTRACT The statistical significance of the pollution haven hypothesis remains low. This suggests that some elements may have been overlooked in hypothesis testing. Here, pollution havens due to trade liberalization may depend on the degree of technological spillover. This spillover affects the industrial concentration of polluting firms. Using an agglomeration model with technological spillover, we analysed the effect of transport costs on pollution havens to clarify this relationship. Interactions between an international emission permit trading market and local spillover in innovation bring about the following multiple equilibria: the poverty trap equilibrium leads to similar results in the case of global spillover, where lower transport costs encourage economic growth in addition to relocation from the South to the North. By contrast, equilibrium with a higher concentration of firms leads to the pollution havens hypothesis because decreased transport costs prompt polluting firms to relocate to South with relatively small markets due to the home market effect, leading to lower economic growth. Our findings imply that the type of spillover in innovation (local or global) determines the pollution haven hypothesis. In a global economy, narrowing the North-South technology gap could contribute to eliminating pollution havens.