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“The Poor Stay Poor”: Household Asset Poverty Traps in Rural Semi-Arid India

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  • Naschold, Felix

Abstract

Although identifying household-level poverty dynamics would have important implications for poverty reduction policies empirical evidence is still scant. This paper employs a novel semiparametric panel data estimator that combines the advantages of estimation methods in the existing literature and applies it to a uniquely long panel data set to examine poverty dynamics in three villages in rural semi-arid India. Structural immobility is pervasive. The currently poor are likely to remain poor, suggesting a structural poverty trap. While all households face static asset holdings, higher castes, larger landholders, and more educated households are significantly less likely to be poor.

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  • Naschold, Felix, 2012. "“The Poor Stay Poor”: Household Asset Poverty Traps in Rural Semi-Arid India," World Development, Elsevier, vol. 40(10), pages 2033-2043.
    • Handle: RePEc:eee:wdevel:v:40:y:2012:i:10:p:2033-2043
    DOI: 10.1016/j.worlddev.2012.05.006
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