Transient poverty in rural China
AbstractThe authors study transient poverty in a six-year panel dataset for a sample of 5,000 households in post-reform rural China. Half of the mean squared poverty gap is transient, in that it is directly attributable to fluctuations in consumption over time. There is enough transient poverty to treble the cost of eliminating chronic poverty when targeting solely according to current consumption - and to title the balance in favor of untargeted transfers. Transient poverty is low among the chronically poorest, and tends to be high among those near the poverty line. Using censored quantile regression techniques, the authors find that systemic factors determine transient poverty, although they are generally congruent with the determinants of chronic poverty. There is little to suggest that the two types of poverty are created by fundamentally different processes. It appears that the same things that would help reduce chronic poverty - higher and more secure farm yield and higher levels of physical and human capital - would also help reduce transient poverty.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 1616.
Date of creation: 30 Jun 1996
Date of revision:
Health Economics&Finance; Environmental Economics&Policies; Poverty Reduction Strategies; Services&Transfers to Poor; Poverty Monitoring&Analysis; Safety Nets and Transfers; Services&Transfers to Poor; Poverty Assessment; Poverty Reduction Strategies; Rural Poverty Reduction;
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