Slipping into and out of Poverty: The Dynamics of Spells
This paper examines the dynamics of poverty. Previous analyses of the dynamics of poverty have either examined only fluctuations in the male heads earnings or looked at the frequency of poverty periods over a fixed time frame. We argue that a more appropriate way to understand the dynamics of poverty is to define spells of poverty. Using this methodology we find that the majority of poor persons at any point in time are in fact in the midst of a rather long spell of poverty. The methodology also allows us to estimate the extent to which poverty spell beginnings and endings are associated with changes in income or changes in family structure. Less than 40 percent of poverty spell beginnings seem to be caused by a drop in the heads earnings,while 60 percent of endings occur when the head's earnings increase. As a result we argue that to understand the causes and potential remedies for poverty, researchers must focus on household formation decisions and on the behavior of so called secondary family members.
|Date of creation:||Sep 1983|
|Date of revision:|
|Publication status:||published as Bane, Mary Jo and David T. Ellwood. "Slipping into and out of Poverty: The Dynamics of Spells." Available through ERIC Clearinghouse on Urban Education, ERIC Document Reproduction Service, Arlington, Virginia alsoin Journal of Human Resources, Vol. 21, No.1, Winter 1986.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Gottschald, Peter T, 1982. "Earnings Mobility: Permanent Change or Transitory Fluctuations," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 450-56, August.
- Kim B. Clark & Lawrence H. Summers, 1978. "Labor Force Transitions and Unemployment," NBER Working Papers 0277, National Bureau of Economic Research, Inc.
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