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Who avoids and who escapes from poverty during transition? - evidence from Polish panel data, 1993-96

Listed author(s):
  • Okrasa, Wlodzimierz

The author uses four-year panel data from Poland's Household Budget Survey to explore the distinction between transitory and long-term poverty, a crucial distinction in designing and evaluating poverty reduction strategies. The author analyzes household welfare trajectories during the period 1993-96, to identify the long-term poor and to determine how relevant household asset endowments are as determinants of household poverty and vulnerability over time. He concludes that the chronically poor constitute a distinct and separate segments of the population, with low turnover. Among specific observations about factors that affect Poland's long-term poverty: 1) Variables in human capital significantly affected the pattern of repeated poverty and vulnerability. Larger households tended to experience poverty and vulnerability, mostly because they contained more children or other dependents. Households with elderly members and those headed by older people, by women rather than men, and by educated people of either gender were least likely to be poor. Poverty was unaffectedby the presence of a disabled person in the household. 2) Households with liquid assets or durables, or with access to financial resources, were less likely to be poor and vulnerable. Households appeared to take advantage of credit and loans to maintain their current level of consumption rather than to augment their stock of assets. 3) Households that were part of kinship networks were less at risk of falling into chronic poverty or vulnerability. 4) Household headed by pensioners were least in danger of impoverishment. Those most in danger were farm households (including"mixed"households headed by workers with an agricultural holding) and households heavily dependent on social welfare. 5) Household of employees were better off than self-employed households when income-based measures of poverty were used, but not when consumption-based measures were used. Neither groups was significantly vulnerable.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2218.

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Date of creation: 30 Nov 1999
Handle: RePEc:wbk:wbrwps:2218
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  1. Keane, Michael & Prasad, Eswar, 1998. "Consumption and Income Inequality in Poland During the Economic Transition," Working Papers 98-38, C.V. Starr Center for Applied Economics, New York University.
  2. Duncan, Greg J & Gustafsson, Bjorn & Hauser, Richard & Schmauss, Gunther & Messinger, Hans & Muffels, Ruud & Nolan, Brian, 1993. "Poverty Dynamics in Eight Countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(3), pages 215-234.
  3. Glewwe, P. & Hall, G., 1995. "Who is Most Vulnerable to Macroeconomic Shocks? Hypotheses Tests Using Panel Data from Peru," Papers 117, World Bank - Living Standards Measurement.
  4. Diamond, Charles A. & Simon, Curtis J. & Warner, John T., 1990. "A multinomial probability model of size income distribution," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 43-61.
  5. Kolodko, G-W & Nuti, D-M, 1997. "The Polish Alternative. Old Myths, Hard Facts and New Strategies in the Successful Transformation of the Polish Economy," Research Paper 33, World Institute for Development Economics Research.
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