Poverty Dynamics

Instructors: Gaston Yalonetzky, OPHI  Research Officer  & María Emma Santos, OPHI Research Officer

Class Objectives:

  • Conceptual issues: Chronic vs. transient poverty. Why studying poverty dynamics?
  • Revision of the state of the art of the literature: indices and models.
  • Examples of Indices.
  • Examples of Modelling Techniques: Spells Approach.



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Poverty Dynamics Part 1
Poverty Dynamics Part 2

Reading List
Basic Readings:
On Indices:
FOSTER, J. E. (2007), “A Class of Chronic Poverty Measures”, Working Paper No. 07-W01, Department of Economics, Vanderbilt University. 
JALAN, J. and M. RAVALLION (1998), “Determinants of Transient and Chronic Poverty, Evidence from Rural China”, Policy Research Working Paper No 1936, The World Bank.

On Modelling Techniques:
BANE, M. and D. ELLWOOD (1986), “Slipping Into and Out of Poverty: The Dynamics of Spells”, Journal of Human Resources 21: 2-23.
LILLARD, L. and R. WILLIS. (1978): “Dynamic Aspects of Earnings Mobility”, Econometrica. 46(5): 985-1011.
STEVENS, A. H. (1999), “Climbing out of Poverty, Falling Back in: Measuring the Persistence of Poverty Over Multiple Spells”, Journal of Human Resources 34: 557-588.

Further readings:
ANTMAN, F. and D. MCKENZIE. (2007b): “Poverty Traps and Non-Linear Income Dynamics with Measurement Error and Individual Heterogeneity”, Journal of Development Studies. 43(6): 1057-83.
CARTER, M. R. and C. B. BARRET. (2006): “The Economics of Poverty Traps and Persistent Poverty: An Asset-Based Approach”, Journal of Development Studies. 42(1): 178-199.
DERCON, S. and J. SHAPIRO. (2006): “Does Poverty Entrap?”, CSAE Working Paper.
JALAN, J. and M. RAVALLION (2002), “Geographic Poverty Traps? A Micro- Model of Consumption Growth in Rural China”, Journal of Applied Econometrics. 17: 329-46. 21
LYBBERT, T., BARRET, C., DESTA, S. and L. COPPOCK. (2004): “Stochastic Wealth Dynamics and Risk Management among a Poor Population”, The Economic Journal. 114: 750-777.
MCKAY, A. and D. LAWSON (2003), “Assessing the Extent and Nature of Chronic Poverty in Low Income Countries: Issues and Evidence”, World Development, 31: 425-439.
SANTOS, P. and C. BARRET. (2006): “Heterogeneous Wealth Dynamics: on the Roles of Risk and Ability”. Mimeo.
SCHLUTER, C. (1997): “On the Non-Stationarity of German Income Mobiltity (and Some Observations on Poverty Dynamics)”. Discussion Paper, DARP/30.
SINGER, B. and S. SPILERMAN. (1976): “Some Methodological Issues in the Analysis of Longitudinal Surveys”, Annals of Economic and Social Measurement. 5/4: 447-74.
YAQUB, S. (2000), Poverty Dynamics in Developing Countries. Institute of Development Studies, Development Bibliography, University of Sussex.