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Climbing out of poverty, falling back in: low income stability in Spain

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  • Olga Canto

Abstract

The study of the probability of entering or escaping a low income spell is not sufficient to fully describe a household's experience in deprivation. If poverty spells are recurrent in time, the persistency of poverty for a given household is not completely described unless the household's likelihood of a fall back into deprivation shortly after exit is considered. It is found that by combining the re-entry equation results with those of the exit equation, one can discuss, in a comprehensive way, which household characteristics promote welfare stability or instability and poverty persistence or transience. Results indicate that one-third of households who manage to leave poverty in Spain return to it shortly after exit. This upward income mobility, if maintained for a year, appears to enable a state of non-poverty for a lengthy period. Better-educated households and households with a spouse are more stable in their income level. Also, the point reached in the income distribution after a jump out of poverty is more a determinant for reducing the household's re-entry probability than is the duration out of poverty.

Suggested Citation

  • Olga Canto, 2002. "Climbing out of poverty, falling back in: low income stability in Spain," Applied Economics, Taylor & Francis Journals, vol. 34(15), pages 1903-1916.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:15:p:1903-1916
    DOI: 10.1080/00036840210129392
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    References listed on IDEAS

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    1. Ann Huff Stevens, 1999. "Climbing out of Poverty, Falling Back in: Measuring the Persistence of Poverty Over Multiple Spells," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 557-588.
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    Cited by:

    1. Dávila Quintana, C. Delia & Malo, Miguel A., 2012. "Poverty dynamics and disability: An empirical exercise using the European community household panel," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 350-359.
    2. Amuedo-Dorantes, Catalina & Serrano-Padial, Ricardo, 2010. "Labor market flexibility and poverty dynamics," Labour Economics, Elsevier, vol. 17(4), pages 632-642, August.
    3. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
    4. 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.
    5. Katsushi S. Imai & Jing You, 2014. "Poverty Dynamics of Households in Rural China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(6), pages 898-923, December.
    6. Ivaschenko, Oleksiy & Mete, Cem, 2008. "Asset-Based Poverty in Rural Tajikistan: Who Climbs out and Who Falls in?," WIDER Working Paper Series 026, World Institute for Development Economic Research (UNU-WIDER).
    7. Katsushi S. Imai & Jing You, 2011. "Poverty Dynamics of Households in Rural China: Identifying Multiple Pathways for Poverty Transition," Discussion Paper Series DP2011-35, Research Institute for Economics & Business Administration, Kobe University.

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