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

• Autores: Olga Cantó Sánchez
• Localización: VIII Encuentro de Economía Pública: Cáceres. 8 y 9 de febrero de 2001, 2001, pág. 26
• Idioma: inglés
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• Resumen

  • The study of the probability of entering or escaping a low income spell is not sufficient in order 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 we consider the household�s likelihood of a fall back into deprivation shortly after exit. We find that combining the re-entry equation results with those of the exit equation we are able to discuss, in a comprehensive way, which of the 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. This upward income mobility, if maintained for a year, appears to provide non-poverty for long. More 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 determinant than duration out of poverty for reducing the household�s re-entry probability.