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Income Mobility, Temporary and Permanent Poverty

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  • Vani K. Borooah
  • John Creedy

Abstract

This paper incorporates poverty persistence in a measure of aggreg ate poverty over two‐periods by decomposing the Foster et al. (1984) class of poverty measures into those temporarily in poverty and those in poverty in both periods. An additional weight is added to the permanent component in forming an aggregate poverty measure over both periods; this weight reflects the degree of poverty‐persistence aversion. The effect on aggregate poverty of mobility between permanent and temporary poverty is found to be unambiguous only in the case of the headcount poverty measure. Simulations are used to investigate the relationship between poverty and mobility. The effects of two different types of mobility (random proportio nal income changes and a systematic regression towards or away from the median) are isolated

Suggested Citation

  • Vani K. Borooah & John Creedy, 1998. "Income Mobility, Temporary and Permanent Poverty," Australian Economic Papers, Wiley Blackwell, vol. 37(1), pages 36-44, March.
    • Handle: RePEc:bla:ausecp:v:37:y:1998:i:1:p:36-44
    DOI: 10.1111/1467-8454.00004
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    Cited by:

    1. Creedy, John & Quy, Ta, 2022. "Income Mobility in New Zealand 2007–2020: Combining Household Survey and Census Data," Working Paper Series 25797, Victoria University of Wellington, Chair in Public Finance.
    2. Butler, Alex & Sweet, Matthias, 2020. "No free rides: Winners and losers of the proposed Toronto Transit Commission U-Pass program," Transport Policy, Elsevier, vol. 96(C), pages 15-28.

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