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Do Changes in the Labour Market Take Families out of Poverty? Determinants of Exiting Poverty in Brazilian Metropolitan Regions

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  • Ana Flávia Machado

    ()
    (Center for Development and Regional Planning (Cedeplar), UFMG)

  • Rafael Perez Ribas

    ()
    (International Poverty Centre)

Abstract

The objective of this Working Paper is to estimate the likelihood of the exit of households from poverty and identify the determinants of this transition, taking into consideration the length of time that households have spent in poverty. Our focus is to analyze whether short-term changes in the labour market affect the probability of exiting or remaining in poverty. We use the only panel data that are available in Brazil for carrying out this kind of analysis: the Monthly Employment Survey (PME), which was conducted from March 2002 to May 2007. However, since this survey follows households for a very short period of time, we had to adopt estimation techniques that control for cases of right- and left-censoring. The most important results in this Working Paper are: 1) the longer the spell of poverty, the lower the probability of exiting it; 2) households that entered into poverty with zero income (namely, their poverty income gap was equal to one) are not those with the lowest probability of exiting this condition; 3) changes in the unemployment rate of household members do not directly affect the duration of the household?s poverty; and 4) the increase of the average wage of informal workers has a significant, positive effect on the probability of the exit of poor households from poverty.

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File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper44.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by International Policy Centre for Inclusive Growth in its series Working Papers with number 44.

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Length: 30
Date of creation: Feb 2008
Date of revision:
Publication status: Published by UNDP - International Poverty Centre, February 2008, pages 1-30
Handle: RePEc:ipc:wpaper:44

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Keywords: Duration of poverty spell; Poverty exit; Labour market; Survival models for left-censored data.;

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References

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  1. Irina Denisova, 2007. "Entry to and Exit from Poverty in Russia: Evidence from Longitudinal Data," Working Papers w0098, Center for Economic and Financial Research (CEFIR).
  2. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 21-51.
  3. Ann Huff Stevens, 1995. "Climbing Out of Poverty, Falling Back In: Measuring the Persistence of Poverty over Multiple Spells," NBER Working Papers 5390, National Bureau of Economic Research, Inc.
  4. Luis Beccaria & Roxana Maurizio, 2009. "Factors associated to poverty mobility in Greater Buenos Aries," Journal of Income Distribution, Journal of Income Distribution, vol. 18(2), pages 35-69, June.
  5. Rosholm, Michael, 2001. "An Analysis of the Processes of Labour Market Exclusion and (Re-) Inclusion," IZA Discussion Papers 332, Institute for the Study of Labor (IZA).
  6. Anna Christina D'Addio & Michael Rosholm, . "Left-Censoring in Duration Data: Theory and Applications," Economics Working Papers 2002-5, School of Economics and Management, University of Aarhus.
  7. Rafael Perez Ribas & Ana Flávia Machado, 2007. "Distinguishing Chronic Poverty from Transient Poverty in Brazil: Developing a Model for Pseudo-Panel Data," Working Papers 36, International Policy Centre for Inclusive Growth.
  8. Alessandro Tarozzi & Angus Deaton, 2009. "Using Census and Survey Data to Estimate Poverty and Inequality for Small Areas," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 773-792, November.
  9. Chris Elbers & Jean O. Lanjouw & Peter Lanjouw, 2003. "Micro--Level Estimation of Poverty and Inequality," Econometrica, Econometric Society, vol. 71(1), pages 355-364, January.
  10. Lorenzo Cappellari & Stephen P. Jemkins, 2002. "Who Stays Poor? Who Becomes Poor? Evidence from the British Household Panel Survey," Economic Journal, Royal Economic Society, vol. 112(478), pages C60-C67, March.
  11. Ricardo Paes de Barros & Samir Cury & Gabriel Ulyssea, 2007. "A Desigualdade de Renda no Brasil Encontra-se Subestimada? Uma Análise Comparativa com Base na PNAD, na POF e nas Contas Nacionais," Discussion Papers 1263, Instituto de Pesquisa Econômica Aplicada - IPEA.
  12. Kajal Lahiri, 2005. "Analysis of Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1093-1095.
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Cited by:
  1. Luis Beccaria & Roxana Maurizio & Ana Fernández & Paula Monsalvo & Mariana Álvarez, 2013. "Urban poverty and labor market dynamics in five Latin American countries: 2003–2008," Journal of Economic Inequality, Springer, vol. 11(4), pages 555-580, December.

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