Climbing out of poverty, falling back in : Low incomes’ stability in Spain
Title: Climbing out of poverty, falling back in : Low incomes’ stability in Spain
Author: CANTÓ SANCHEZ, Olga
Citation: Applied economics, 2002, Vol. 34, No. 15, pp. 1903-1916
ISSN: 0003-6846; 1466-4283
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.
Published online: 04 Oct 2010
Version: Based on content in the author's EUI PhD thesis, 1998 - http://hdl.handle.net/1814/4882
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