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Climbing Out of Poverty, Falling Back In: Measuring the Persistence of Poverty over Multiple Spells

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Author Info
Ann Huff Stevens

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Abstract

This paper investigates the persistence of poverty over individuals' lifetimes using a hazard rate, or spells approach. Previous research on poverty dynamics using the spells approach has been limited by its failure to take into account multiple episodes of poverty. I estimate hazard models for exiting from and for returning to poverty and use the estimated parameters to calculate distributions of total time spent in poverty over multiple spells, using longitudinal data from the Panel Study of Income Dynamics. These models incorporate observable personal and household characteristics, as well as unobserved heterogeneity. My findings emphasize the importance of considering multiple spells in an analysis of poverty persistence. For black and white individuals falling into poverty in some year, approximately 50 and 30 percent, respectively, will have family income below the poverty line in at least five of the next ten years. A single spells approach predicts comparable figures of only 26 and 13 percent. To check the robustness of these predictions I also utilize two alternative approaches -- direct tabulations from panel data and estimation of a components-of-variance model -- and compare predictions of poverty persistence based on the three methods.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5390.

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Date of creation: Dec 1995
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Publication status: published as Journal of Human Resources (Summer 1999).
Handle: RePEc:nbr:nberwo:5390

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I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty

References listed on IDEAS
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  10. Stevens, Ann Huff, 1994. "The Dynamics of Poverty Spells: Updating Bane and Ellwood," American Economic Review, American Economic Association, vol. 84(2), pages 34-37, May. [Downloadable!] (restricted)
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    Other versions:
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  1. Arne Uhlendorff & Klaus F. Zimmermann, 2006. "Unemployment Dynamics among Migrants and Natives," Discussion Papers of DIW Berlin 617, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  2. Martin Biewen, 2002. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," Discussion Papers of DIW Berlin 292, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  3. Jesús Pérez--Mayo, 2005. "Identifying deprivation profiles in Spain: a new approach," Applied Economics, Taylor and Francis Journals, vol. 37(8), pages 943-955, May. [Downloadable!] (restricted)
  4. repec:ese:iserwp: is not listed on IDEAS
  5. Francesco Devicienti, 2001. "Estimating Poverty Persistence in Britain," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-3, International Conferences on Panel Data. [Downloadable!]
    Other versions:
  6. Anna Giraldo & Enrico Rettore & Ugo Trivellato, 2002. "The persistence of poverty: true state dependence or unobserved heterogeneity? Some evidence from the Italian Survey on Household Income and Wealth," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-1, International Conferences on Panel Data. [Downloadable!]
  7. L. Quillian, . "How Long Do African Americans Stay in High-Poverty Neighborhoods? An Analysis of Spells," Institute for Research on Poverty Discussion Papers 1203-00, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  8. Michael Fertig & Marcus Tamm, 2007. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," Working Papers 65, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
    Other versions:
  9. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2005. "Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK," The Centre for Market and Public Organisation 05/134, Department of Economics, University of Bristol, UK. [Downloadable!]
    Other versions:
  10. Paul Gamba & Elliot Mghenyi, 2005. "Rural Poverty Dynamics, Agricultural Productivity and Access to Resources," International Development Collaborative Working Papers KE-TEGEMEO-WP-21, Department of Agricultural Economics, Michigan State University. [Downloadable!]
  11. Dalit Contini & Nicola Negri, 2005. "Would Declining Exit Rates from Welfare Provide Evidence of Welfare Dependence in Homogeneous Environments?," LABORatorio R. Revelli Working Papers Series 39, LABORatorio R. Revelli, Centre for Employment Studies. [Downloadable!]
  12. Coral del Río & Carlos Gradín & Olga Cantó, 2006. "What helps households with children in leaving poverty? Evidence from Spain," Working Papers 24, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
  13. Cappellari, Lorenzo & Jenkins, Stephen P., 2002. "Modelling Low Income Transitions," IZA Discussion Papers 504, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  14. Elena Bárcena Martín & Frank A. Cowell, 2006. "Static and Dynamic Poverty in Spain, 1993-2000," Hacienda Pública Española, IEF, vol. 179(4), pages 51-77, September. [Downloadable!]
    Other versions:
  15. Ari A. Perdana, 2005. "Risk management for the poor and vulnerable," CSIS Economics Working Paper Series WPE093, Centre for Strategic and International Studies, Jakarta, Indonesia. [Downloadable!]
    Other versions:
  16. Ana Flávia Machado & Rafael Perez Ribas, 2008. "Do Changes in the Labour Market Take Families out of Poverty? Determinants of Exiting Poverty in Brazilian Metropolitan Regions," Working Papers 44, International Poverty Centre. [Downloadable!]
  17. Katharina Hauck & Nigel Rice, 2004. "A longitudinal analysis of mental health mobility in Britain," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 981-1001. [Downloadable!]
  18. María Cecilia Calderón & Alberto Chong & Mark Gradstein, 2006. "Foreign Aid, Income Inequality, and Poverty," RES Working Papers 1044, Inter-American Development Bank, Research Department, revised Oct 2006. [Downloadable!]
  19. Perez-Mayo, Jesus, 2003. "Measuring deprivation in Spain," IRISS Working Paper Series 2003-09, IRISS at CEPS/INSTEAD. [Downloadable!]
  20. Hielke Buddelmeyer & Sher Verick, 2007. "Understanding the Drivers of Poverty Dynamics in Australian Households," IZA Discussion Papers 2827, Institute for the Study of Labor (IZA). [Downloadable!]
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