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Understanding the Drivers of Poverty Dynamics in Australian Households

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Author Info

  • Buddelmeyer, Hielke

    ()
    (Melbourne Institute of Applied Economic and Social Research)

  • Verick, Sher

    ()
    (ILO International Labour Organization)

Abstract

Using longitudinal household data and an econometric model of conditional poverty transitions, this paper contributes to the growing literature on poverty dynamics in Australian households. The results reveal that a range of household head, partner and demographic characteristics in addition to life-changing events have an impact on both the likelihood of remaining poor and slipping into poverty. These findings have important implications for Australian policymakers: tertiary education and employment are key factors in keeping households out of poverty; having a disability increases the probability of becoming poor and remaining in such a situation; households in outer-regional or remote areas are more likely to become poor and continue to live under such hardship; and finally, life-changing events, especially becoming separated, can lead households into persistent poverty. These results are robust to a range of poverty definitions. By drawing on research that utilizes such longitudinal data, policymakers will be much better informed about the drivers of material deprivation in Australia and subsequently how best to design policies that target and support the most vulnerable households.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2827.

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Length: 29 pages
Date of creation: Jun 2007
Date of revision:
Publication status: published in: Economic Record, 2008, 84 (266), 310-321
Handle: RePEc:iza:izadps:dp2827

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Keywords: household panel data; poverty dynamics; state dependence; attrition;

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References

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  1. Cappellari, Lorenzo & Jenkins, Stephen P., 2002. "Modelling low income transitions," ISER Working Paper Series 2002-08, Institute for Social and Economic Research.
  2. 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.
  3. Peter Saunders & Bruce Bradbury, 2006. "Monitoring Trends in Poverty and Income Distribution: Data, Methodology and Measurement," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 341-364, 09.
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Cited by:
  1. Mitra, Sophie & Posarac, Aleksandra & Vick, Brandon, 2011. "Disability and poverty in developing countries : a snapshot from the world health survey," Social Protection Discussion Papers 62564, The World Bank.
  2. Sara Ayllón, 2013. "Understanding poverty persistence in Spain," SERIEs, Spanish Economic Association, vol. 4(2), pages 201-233, June.
  3. REINSTADLER Anne & RAY Jean-Claude, 2010. "Macro Determinants of Individual Income Poverty in 93 Regions of Europe," CEPS/INSTEAD Working Paper Series 2010-13, CEPS/INSTEAD.
  4. FUSCO Alessio & ISLAM Nizamul, 2012. "Understanding the drivers of low income transitions in Luxembourg," CEPS/INSTEAD Working Paper Series 2012-31, CEPS/INSTEAD.

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