Transient Poverty Research Articles

Poverty dynamics for Ghana during 2005/06–2016/17: An investigation using synthetic panels

Ghana has consistently kept its poverty rate lower than the regional average over the past 25 years, but this positive trend has slowed down recently. Without actual panel data, it would be next to impossible to probe into the dynamic patterns beneath this trend. We offer the first study that examines the dynamics of overall, moderate, and extreme poverty in Ghana during 2005/06–2016/17, addressing the lack of actual panel data by constructing synthetic panel data from three nationally representative cross-sectional rounds of the Ghana Living Standards Surveys (GLSSs).We present a well-defined decomposition framework, which allows us to examine a rich profile of the dynamics among different population groups. Beyond poverty analysis, we further investigate the dynamics of the full consumption expenditure distribution. Although we find considerable conditional chronic (extreme) poverty rates hovering around 50–60%, there was more upward mobility than downward mobility during this period. Poor households were also more likely to have stronger consumption expenditure growth. The findings suggest that factors such as educational attainment, female household headship, urban residence, and nonagricultural work are positively correlated with poverty reduction. Compared to all other correlates, educational attainment appears to be the most effective in pushing households out of poverty and keeping them from falling into poverty. These results contribute to the growing literature on poverty dynamics in developing countries in general and provide new and relevant inputs for policy advice in Ghana in particular, especially since policies that address chronic poverty typically differ from those that tackle transient poverty.

Does global warming worsen poverty and inequality? An updated review

AbstractWe offer an updated and comprehensive review of recent studies on the impacts of climate change, particularly global warming, on poverty and inequality, paying special attention to data sources as well as empirical methods. While studies consistently find negative impacts of higher temperatures on poverty across different geographical regions, with higher vulnerability especially in poorer Sub‐Saharan Africa, there is inconclusive evidence on climate change impacts on inequality. Further analyzing a recently constructed global database at the subnational unit level derived from official national household income and consumption surveys, we find that temperature change has larger impacts in the short term and more impacts on chronic poverty than transient poverty. The results are robust to different model specifications and measures of chronic poverty and are more pronounced for poorer countries. Our findings offer relevant inputs into current efforts to fight climate change.

The Application of Plural Panelist Synthesis Method in Identifying Determinant Factors That Influence Economic Growth

This research aims to study intra-generational income mobility and poverty, and it also seeks to characterize and measure individual mobility by analyzing the duration of poverty, consecutive versus transient poverty, and the likelihood of re-entry. Researchers used a synthetic panel approach to estimate individual income in the second round based on data from the first round. This approach allows research to look at changes in individual income over time, even though actual panel data is unavailable. Based on research results, it show that the main factor influencing stagnation is the difficulty of leaving poverty, not the problem of entering poverty. In addition, analyses that consider the entire period also provide different results regarding the level of permanence in poverty. Synthetic panel analysis shows that the individuals who move out of poverty are those who were poor at the start of each period studied, not those who already had incomes above the poverty line. In addition, these results also show that the proportion of individuals who experience poverty in a shorter period is greater than that of those who experience poverty for four years. The analysis shows changes in poverty dynamics between the two periods studied. Successive poverty dominates, meaning that individuals who fall into poverty tend to remain poor over that period. However, the predominance is shifting towards transient poverty, where individuals experience poverty for shorter periods, moving in and out of poverty within that period.

POVERTY AND INEQUALITY IN NIGERIA: A HOUSEHOLD-LEVEL FOUR-WAVE COMPARATIVE STUDY

Poverty and income inequality have been a recurring challenge in the global space for more than five decades. While these challenges have been declining globally, they have remained unabated and rising in Nigeria; thus, making Nigeria tagged as their destination. Thus, the research set out to evaluate the poverty and inequality in Nigeria using a household four-wave of secondary panel data of 4,000 nationally representative households of the Nigeria General Household Survey GHS - Panel collected by the National Bureau of Statistics from 2010 to 2019. Analytical tools used were descriptive statistics, the Foster-Greer-Thorbecke (FGT) poverty index, Lorenz’s curve, and the Gini coefficient. The results of the Foster-Greer-Thorbecke poverty headcount showed that over 50% of all the respondents remained under the poverty line throughout the four waves, thus indicating the prevalence of chronic poverty rather than transient poverty during the period. The general poverty depth ranged from 0.21 to 0.23 and the poverty severity ranged from 0.11 to 0.12. The Gini coefficient of inequality for total expenditure ranged from 0.39 to 0.44 with higher sectoral inequality. The results showed that Nigeria had chronic poverty, moderate poverty depth, and severity; and moderate inequality. Therefore, with strong political will and consistently right policies, Nigeria can exit extreme poverty. This work unraveled the reason behind the persistently high poverty status and inequality of Nigeria and has revealed the path not taken, which if done would enable Nigeria to exit extreme poverty and hunger.

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.

Can rural livelihood programs enhance capabilities and reduce vulnerability to poverty? Evidence from a tribal region of eastern India

Quantitative evidence on the impact of social protection such as livelihood programs (LPs) on reducing vulnerability to poverty (VtP) is scant. Therefore, this paper aims to estimate VtP and the ability of LPs to reduce it. The analysis is based on the primary data collected in 2018–19 from 479 households in a tribal region of eastern India. First, household VtP was estimated using the feasible generalized least squares (FGLS) method. Households were categorized into four groups based on their current and predicted future poverty status: chronic poor, transient poor, escaped poverty, and non-poor. Second, factors influencing this movement of households from current to future poverty states were determined using multinomial logistic regression. Third, the impact of the LP on VtP was investigated using the endogenous switching regression (ESR) approach. The FGLS estimates show that 34.7% of households are vulnerable to future poverty, which exceeds the actual poverty rate of 28.6%. The major factors responsible for exacerbating chronic poverty and causing transient poverty are chronic illness, climate shocks, and the sale of assets. The ESR results indicate that a household’s VtP is reduced by 3% for those that participate in LPs. Although the LP evaluated in this study has an average positive impact in reducing vulnerability, there is wide heterogeneity among the beneficiaries as the geographically disadvantaged communities lag behind the others. Therefore, the study suggests strengthening such LPs with a particular focus on disadvantaged and vulnerable communities.

AN ALTERNATIVE METHODOLOGY TO MONITOR CHRONIC AND TRANSIENT POVERTY IN INDIA

The economic growth in India has been impressive in the last few decades, yet it continues to be a home for millions of poor. The poverty measures debate across the developing world has generated more heat than light as there is no consensus on constructing the poverty line. Characterization of poverty and heterogeneity of the poor needs more profound understanding and investigation. This paper attempts to provide an alternative framework to track Chronic and Transient poverty through decile density analysis and the Chronic-Transient Poverty Ratio by applying the Kernel Density function for the National Sample Survey Organisation’s consumer expenditure distribution in 55th, 61st, 66th, and 68th quinquennial rounds. An increase and a stagnant CTP ratio for urban and rural India implies that poverty reduction interventions are less impactful in rural India. A renewed thrust on poverty alleviation programmes is required in Urban India. Other developing and underdeveloped countries can emulate the proposed framework to analyze chronic and transient poverty conditions.

Poverty Dynamics in Indonesia: The Prevalence and Causes of Chronic Poverty

This study aims to determine the chronicity of poverty in Indonesia using the equally distributed equivalent (EDE) poverty gap method, tracking Indonesian households in 2007 and 2014. The results indicate that the largest component of poverty among households was chronic (77%). Compared to transient poverty, chronic poverty is more common across individuals. Unlike previous studies, we used data at the district level to measure the poverty line, discovering that the cost of poverty inequality is lower than often reported. This decision is because disaggregated data (poverty line) can show a more realistic poverty threshold. Using a quantile regression approach, we found evidence that age, gender, employment status, and education were significant factors of chronicity. Other significant factors of chronic poverty include large household size, having no access to services (finance, electricity, information, and mobility), and having limited or no assets. Casual employment in the agricultural sector and living in rural areas increase the probability of poverty, although not necessarily chronic. Poverty alleviation programs, therefore, need to target the right causes as exposure to poverty varies across households.

Transient poverty in a sustainable development context

ABSTRACT Transient poverty (TP) is a phenomenon that, by its characterisation, references a condition that may not necessarily be permanent. Its occurrence may result from an external shock, such as a severe weather-related event or geographic, national, or global impact on the economy, such as a hurricane, financial crisis, or as most recently, a pandemic. The defining aspects of TP and the needs of those pushed into TP offer an opportunity to address one aspect of poverty, which is of significance given both the disproportionate vulnerability of the poor to external shocks as well as the prohibitive effect of poverty on establishing resilience. Unfortunately, TP is not often assessed and is routinely combined and categorised as ‘poverty’, eliminating an opportunity to address unique aspects of TP and establish policies that may be beneficial to the sub-group. This paper provides a bibliometric evaluation of TP specific to the sustainable development literature, highlighting the research gap and providing a rationale for active research on the social phenomenon regarding the Sustainable Development Goals (SDG) in general and specifically SDG 1: No poverty. There are three key findings relevant to sustainability. Firstly, there seems to be a disconnection between TP and the sustainable development theory, particularly in a multidisciplinary discussion. Secondly, human action in degrading ecosystems strongly influences TP and exacerbates overall poverty levels. Finally, efforts to tackle transient poverty need to consider issues such as gender, education, health, and political aspects. Based on the findings, items for future research are also presented.

The dynamics of relative poverty in China in a comparative perspective

I use household panel data to study the dynamics of relative poverty in China, Germany, the United Kingdom, and the United States. Compared to the three Western countries, not only is relative poverty more common in China, it is also deeper and more severe. Transient poverty accounts for less than half of the total poverty in Germany or the US, but about two-thirds of that in China or the UK. Over three waves, 87% of Germans, 78% of Britons, 71% of Americans, but only 46% of Chinese were never poor. Using a multinomial logistic regression model, the determinants of poverty are found to be very similar across the four countries. But the variance explained by that model is much smaller for China than for the three Western countries. The findings of this paper also challenge some existing understanding of poverty dynamics in general.

Understanding poverty dynamics and vulnerability in Tanzania: 2012–2018

AbstractWe study poverty dynamics and vulnerability in Tanzania between 2012 and 2018 using synthetic panel methods. Under the surface of apparent stability in aggregate poverty rates, and despite robust economic growth, households experienced strong fluctuations in consumption levels during this period: 12.5% of the population remained in persistent poverty, a further 30% experienced transient poverty, and one of five Tanzanians above the poverty line in 2012 was poor 6 years later. Education and employment in the nonfarm sector are particularly effective at shielding households from poverty, while rural and large households with many children are most likely to slip into poverty. Considerable differences exist between less‐deprived areas such as Dar es Salaam or Kilimanjaro and regions in the northwest, where persistent poverty is especially high. Looking ahead to the impact of COVID‐19, those households least prepared to take preventive measures against the virus suffer from more adverse poverty dynamics, while those involved in the sectors taking the hardest economic hit from the pandemic start from a better pre‐pandemic situation. This suggests that novel policies that specifically support this ‘new vulnerable’ need to be combined with redoubled efforts to address the structural causes of poverty and vulnerability.

Climbing up the Ladder and Watching Out for the Fall: Poverty Dynamics in Rural Bangladesh

This paper analyses poverty dynamics in rural Bangladesh using a nationally representative panel dataset of 5,020 rural households interviewed in 2011/12, 2015, and 2019. Findings show that education, savings, assets, international remittance, non-farm employment, substantial safety net transfers, and women’s empowerment are key factors in breaking chronic and transient poverty. Rural infrastructure development and market access through improved connectivity are also critical for sustained poverty alleviation. On the other hand, woman-headed households (widowed, divorced or abandoned) are found to be particularly vulnerable to impoverishments. The results are consistent across multinomial logit, simultaneous quantile regression, and panel fixed effects models. Thus, policies and programs that address the determinants of chronic and transient poverty identified in this study hold promise for sustained poverty reduction in rural Bangladesh.

Household Social Expenditure in Ghana: Examining the Ex-Post Effects and Vulnerability to Poverty

We estimate the effect of household social expenditure on vulnerability to poverty using the four latest cross-sectional waves of Ghana Living Standard Survey (GLSS) from 1999 to 2017. Using a 3-Stage Least Square and Quantile Regression, our results show a widening consumption ex-post welfare gap between the poorest households and the non-poor households in a per-dollar social expenditure. Further, we estimate the probability of an ex-ante poverty using vulnerability to expected poverty. The results, however, indicate that regardless of poverty status, household vulnerability to poverty increased consistently between 1999 and 2017, and the very poor households showing the severest vulnerability. Hence, it is concluded that social expenditure increases the chances of a poor household falling into chronic poverty a non-poor household into transient poverty in the future.

Estimating poverty and vulnerability to monetary and non-monetary poverty: the case of Vietnam

Drawing on three-wave panel data from the Vietnam Housing Living Standard Surveys (VHLSS) 2010, 2012, and 2014 and employing a fuzzy method, this paper estimates chronic and transient poverty across multiple dimensions (income, education, health, housing, basic services, durable assets, economic status) in Vietnam. Using standard deviation as a measure of risk, this study further defines vulnerability as a probability for becoming poor and estimates vulnerability to poverty from the stochastic variation of expected deprivation within a defined interval. We further apply the method of multilevel analysis to assess the deprivation of households and distinguish vulnerability as influenced by idiosyncratic (household-specific-level) and covariate (province-level) shocks. It is observed that while the number of chronic poor in all dimensions is quite low, the proportion of chronic poor in the housing dimension is the highest (around 5% over the applicable years nationwide). Regional variation in non-monetary dimensions of poverty is substantial and clearly distinct from monetary poverty. We show that there are more multidimensionally poor households that are vulnerable to idiosyncratic shocks than to covariate shocks, and the proportion of vulnerable households (to covariate shocks) in the housing dimension is significantly greater than that in other dimensions. Almost all covariates of household and province are significantly different between vulnerable and non-vulnerable groups across the multiple dimensions of poverty other than health. Our findings suggest an urgent need for policy attention on the explicit nature of vulnerability and on the many dimensions of poverty in specific regions, and to look beyond the current official monetary-based approach.

Analysis of multidimensional poverty dynamics in Indonesia: The effect of demographic and institutional factors

Measuring poverty only from a monetary perspective is lacking. Given the variety of human needs, poverty needs to be measured multidimensionally. Hence, this study analyzes multidimensional poverty dynamics and identifies its determinants from the demographic and institutional factors. Using the Multidimensional Poverty Index (MPI) and data from the two survey periods of the Indonesia Family Life Survey (IFLS), it is known that multidimensional poverty tends to be transient rather than chronic. The highest education level of the head of the household, the level of dependency, the island of residence, the village political system, and the village government's corruption affect both chronic and transient poverty categories. The marital status of household heads, household size, and customary norms only affected the chronic poor category

Factors influencing the gender gap in poverty: the Indonesian case

Indonesia reduced its poverty rate to a historical level of below 10%. Nevertheless, nearly 20% of the population remains vulnerable to falling into poverty. This study employs the Equally Distributed Equivalent (EDE) model finding that chronic poverty accounted for 69% while transient poverty accounted for the 30% in 2010. Access to credit, education level, and poor access to health services, influences the likelihood of chronic and transient poverty. Women face higher probabilities of remaining poor (chronic) or of falling into poverty (transitory) than men, due to a lack of access to health services and education. Women in urban areas are more likely to fall into transient poverty than men. Health and education services in rural areas are more urgently needed than in cities, as poverty is more highly associated with rural areas than in urban environments. Having larger families could increase the likelihood of chronic and transient poverty.

DINAMIKA DAN POLA KEMISKINAN DI KABUPATEN LOMBOK TIMUR

This study discusses poverty dynamicsand its pattern wherethe significance of the study is to accelerate implementation of poverty alleviation effectively. The study method used is mixed method, quantitative and qualitative. The result of study in 2016-2018 indicatedthat number of people who moved out poverty (mover) larger than who move into poverty (faller).Meanwhile, povery pattern indicated that number of people who experienced transient poverty (50.12 percent) larger than number of people who experienced chronical poverty (48.63 percent). The implication of the study is not only number of people changed each year, but also their poverty status. Therefore, up dating of povery data must be carried out regularly each year

Measuring poverty with noisy and corrected estimates of annual consumption: Evidence from Nigeria

AbstractAn opportunity to improve measurement and modelling of poverty in Africa arises from recent intra‐year panel surveys that observe household consumption in post‐planting and post‐harvest periods. Observing the same household twice lets an intra‐year correlation be estimated, which can be used to form a corrected estimate of annual consumption. The usual approach surveys consumption for just one short period, like a week or month, and extrapolates to an annual total. This may adequately estimate mean annual consumption for samples spread over a year but overstates dispersion. The resulting noise in consumption estimates inflates measures of poverty and inequality and creates misclassification errors that bias logit and probit models of poverty determinants. This study uses data from the 2012/2013 Nigeria General Household Survey panel to show effects on poverty measures of using annual estimates extrapolated from short‐period surveys. With the corrected extrapolation method that uses intra‐year correlations to adjust for inflated variances, Nigeria's poverty headcount rate falls by one half. Hence, much of the poverty measured in cross‐sectional surveys is transient poverty, for which different policy interventions are needed than for alleviating chronic poverty.

DETERMINANTS OF MULTIDIMENSIONAL POVERTY TRANSITIONS AMONG RURAL HOUSEHOLDS IN NIGERIA

Despite the progress in poverty reduction globally, millions of people are either near or living in severe multidimensional poverty in Nigeria. This study examined multidimensional poverty transitions in rural Nigeria, employing the Alkire and Foster measure of multidimensional poverty, Markov model of poverty transitions and the multinomial logistic regression model for analysis. Results showed that multidimensional poverty among rural households in Nigeria was mainly chronic (46.5%) while education and assets dimensions contributed most to the incidence and severity of multidimensional poverty among the households respectively. Educational and marital status, household size and number of assets owned influenced transient poverty while tertiary education, household size and number of assets owned influenced chronic poverty. The enactment and implementation of relevant laws and policies against the marginalization of the poor and vulnerable with respect to ownership of assets and intensification of efforts and incentives, aimed at encouraging human capital development, is key in the fight against poverty in rural Nigeria.

Catastrophic health expenditure as a result of health shocks: challenge to universal health coverage In Nigeria

Health shocks coping mechanisms provide important information on how households respond to health shocks and how payment may affect their future welfare. Health spending ratio to household expenditure, can state if there is threat to consumption especially if the out-of-pocket (OOP) payments is followed by catastrophic or impoverishment consequences. The World Health Organization (WHO) has re – affirmed that when people suffer financial hardship due to OOP, it is impossible to get closer to Universal health coverage (UHC). During health shocks, informal coping mechanisms can be employed by households to mitigate cost of illness especially in low- and middle-income countries including Nigeria where there is poor financial protection. It has been proven that this can have implications for both transient poverty and long-term poverty traps. Health shocks may adversely influence household financial burden, increase hardship, affect ability to contribute to positive child health and education outcome which is a dire consequence of high reliance of OOP payment, it also further widens the intergenerational equality which UHC tends to preach against. Catastrophic Health Expenditures as a result of OOP payment when health shocks occur is an enormous challenge to achieving UHC. It is therefore more urgent than ever for the Nigerian Government to create innovative ways to increase financial protection, intensify implementation of health policies for all its citizens irrespective of social class, age, gender or area of residence and draw lessons from other countries who have achieved or near achieve UHC.Keywords: Catastrophic Health Expenditures, Universal Health CoverageSavannah Journal of Medical Research and Practice 2018;7(1):01- 06