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Dynamics of Poverty

Dynamics of Poverty. Poverty Spells. Mary Jo Bane and David Ellwood,“Slipping into and Out of Poverty: The Dynamics of Spells,” The Journal of Human Resources , Vol. 21, No. 1 (Winter, 1986), 1-23. (Source for the following 6 slides.) What are poverty spells? Why study poverty spells?

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Dynamics of Poverty

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  1. Dynamics of Poverty

  2. Poverty Spells Mary Jo Bane and David Ellwood,“Slipping into and Out of Poverty: The Dynamics of Spells,” The Journal of Human Resources, Vol. 21, No. 1 (Winter, 1986), 1-23. (Source for the following 6 slides.) • What are poverty spells? • Why study poverty spells? • What is the distribution of poverty spells by length? • How do poverty spells begin? • How do poverty spells end? • What does the analysis of poverty spells tell us about welfare dependency?

  3. Bane and Ellwood “Slipping Into and Out of Poverty” • What are poverty spells? • Continuous periods during which income falls below the poverty line. • Why study poverty spells? • Because we need to distinguish between the larger population of people who are ever poor, and those who are poor at a point in time if we are the understand the effects of culture, dependency, and the allocation of assistance.

  4. Poverty Spells: Bane and EllwoodDistribution of Completed Spells of Poverty

  5. Poverty Spells: Bane and EllwoodDistribution of Completed and Uncompleted Spells of Poverty

  6. Bane and EllwoodConclusions of “Slipping Into and Out of Poverty” • Most of those who ever become poor will have a short stay in poverty. • The majority of those who are poor at a given time have very long spells of poverty. • Most people use aid programs briefly. • The bulk of aid goes to a small group that has very long stays in poverty. • Changes in family structure and life cycle events explain nearly one-half of spell beginnings. • A fall in the head’s earnings explain a small minority of beginnings. • Increase earnings of all household members is the primary route out of poverty. • The poverty population is extremely heterogeneous.

  7. Poverty Spells • Consequences of Bane and Ellwood’s Work • Survey of Income and Program Participation (SIPP)--a longitudinal survey that allow the analyst to observe how the status of the same group of people changes over time; ie., to study the dynamics of poverty. http://www.census.gov/hhes/www/poverty/newguidance.html#sipphighlight • Dynamics of Economic Well-Being: Poverty, 1996 to 1999http://www.census.gov/hhes/www/poverty/sipp96/sipp96.html • Methodology applied to spells of welfare receipt

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