An overview of issues associated with the US poverty line

Includes bibliography

Relating severe poverty and chronic poverty

The severely poor are very poor since their consumption is far below the absolute poverty line, and the chronically poor are very poor since their consumption persists for long periods below the absolute poverty line. A combination of chronic poverty and severe poverty (CSP) must represent the very worst instance of poverty. Yet the exercise in this paper of asking simple questions about CSP shows large research gaps. Quantified statements on CSP at the country level can be made for just 14 countries, and at the household level in just six countries. This data suggests a positive correlation between severe poverty and chronic poverty, both at the country level and the household level. Understanding the CSP relationship – whether it is strong, where it arises, what causes it – may improve our explanation of observed cross-country variation in the elasticity between macroeconomic growth and poverty reduction, and why within countries, some households take better advantage of opportunities afforded by macroeconomic growth. Some limited data suggests similarity in socioeconomic characteristics of the severe poor and the chronic poor in terms of location, household size, gender, education and economic sector of work. Of concern is that microlongitudinal datasets drop large proportions of their base year samples, and how this affects our understanding of CSP is not well evaluated. On causal mechanisms, evidence suggests that CSP may be caused by parental CSP (i.e. an intergenerational CSP cycle) and in households not previously poor, CSP may be caused by a morbidity cycle.

Farm Poverty in Kerala: A case study of Alappuzha, Trissur, Palakkad and Wayanad

The present study was an attempt to analytically approach the problem of farm poverty in Kerala from an entirely different angle by incorporating an independently developed and reformulated definition of poverty line in terms of physical units of operational holdings (say, acre). The entire discussion on farm poverty emerged out of proper co-ordination of two important factors popularly considered as the distinct features of Ipoverty, conducted in the light of inter regional variations in farm productivity tried to highlight various grave issues deserving thorough introspection.

Short-term poverty dynamics of rural households: Evidence from Central Sulawesi, Indonesia

The understanding of poverty dynamics is crucial for the design of appropriate poverty reduction strategies. Taking the case of Central Sulawesi, we investigate the determinants of both chronic and transitory poverty using data from 264 randomly selected households interviewed in 2005 and 2007. Regarding the US 1$/day poverty line, the headcount index declined from 19.3% in 2005 to 18.2% in 2007. However, we observed an increasing number of people living on less than US 2$/day expressed in purchasing power parity (PPP). The results of the estimated multinomial logit model applied in this study indicate that a lack of non-agricultural employment opportunities and low endowment of social capital are major determinants of chronic as well as transitory poverty in this province of Indonesia. These results are used to draw policy conclusions with respect to the alleviation of transitory and chronic poverty in Central Sulawesi.

Conflict-induced poverty: Evidence from Colombia

En Colombia, la pobreza y el conflicto están estrechamente relacionados. Este estudio usa medidas de disuasión del gobierno como instrumentos de varias variables específicas de conflicto para estimar el impacto del conflicto sobre la pobreza en Colombia. Usando datos del censo a nivel municipal para el año 2005, evalúo el efecto sobre la incidencia urbana y rural del recientemente-desarrollado Índice de Pobreza Multidimensional. Los resultados sugieren que el conflicto aumenta significativamente la pobreza rural. Esto es consistente con el hecho que la mayor parte del conflicto en Colombia ocurre en las áreas rurales. También evalúo el efecto rezagado del conflicto en la pobreza para concluir que éste dura por al menos tres años pero que decae en el tiempo. Finalmente, pruebo que mis resultados son robustos a una batería de especificaciones adicionales, incluyendo una versión modificada de mi variable dependiente y el uso de una base alternativa de conflicto.

ICTs and decision-making: findings from the Poverty Assessor

Pro-poor decision making depends on an understanding of the complexities and interrelationships between household livelihood, demographic, and economic factors. This article describes the design and implementation of the Poverty Assessor, a software programme to assist practitioners, policy makers, and researchers in visualising the direct impacts on poverty of specific livelihood factors and events among populations living in poverty. The software enables users to upload their own data and profile households in relation to the national poverty line, by selecting from a range of demographic and livelihood indicators. The authors present findings from the programme, using a dataset from Bolivia.

Voices of the Poor: Poverty and Growth in Albania

This paper uses three waves of panel surveys at the household level to study growth and poverty in Albania over the period 2002-2004. It attempts to answer two main questions. The first question is directed at finding the micro determinants of growth and aims to expose the obstacles households face to improve their economic situation. The main focus of the analysis is to investigate the importance of health, education, and infrastructure indicators for income growth. The second question asks whether growth in Albania during the period 2002-2004 has been pro-poor. I find that there is some evidence for a convergence of incomes and a pro-poor growth, which has led to a substantial decrease in the number of people living under the poverty line. I also find that infrastructure has not been an important determinant for income mobility, and neither has health. Only the higher education of poor urban households seems to have affected prospects for growing out of poverty, and unexpectedly, the relationship is negative.

A robust poverty profile for Brazil using multiple data sources

This paper presents a poverty profile for Brazil, based on three different sources of household data for 1996. We use PPV consumption data to estimate poverty and indigence lines. “Contagem” data is used to allow for an unprecedented refinement of the country’s poverty map. Poverty measures and shares are also presented for a wide range of population subgroups, based on the PNAD 1996, with new adjustments for imputed rents and spatial differences in cost of living. Robustness of the profile is verified with respect to different poverty lines, spatial price deflators, and equivalence scales. Overall poverty incidence ranges from 23% with respect to an indigence line to 45% with respect to a more generous poverty line. More importantly, however, poverty is found to vary significantly across regions and city sizes, with rural areas, small and medium towns and the metropolitan peripheries of the North and Northeast regions being poorest.

Meeting the millennium poverty reduction targets in Latin America and the Caribbean

Includes bibliography

Options for rural poverty reduction in Latin America and the Caribbean

Includes bibliography

A poverty profile and functional aspects of Brazilian labour markets

Includes bibliography

Poverty in Israel

The paper deals with poverty within Israel. Against the background of the history of pre-state Israel and the developments after the establishment of the State of Israel in 1948 the historical roots of Israeli poverty are analyzed. Thus the ‘socialist’-Zionist project, ethnic exclusion, religious and intra-Jewish ethnic lines of conflict as well as the Bedouins, Druzes and Israeli Arabs as ‘specific’ Israeli citizen are discussed. Despite the economic growth in Israel since 2003 ‘the majority of Israeli wage earners (over 60percent) earned less than $1,450 a month last year’ (Goldstein 2007, p. 1). In 2004 1.3 million Israelis lived below the poverty line, a number which in 2005 increased to more than 1.5 million Israelis. In spite of growing economic prosperity the proportion of families belonging to the working-poor, i.e. families with at least one family member in paid employment, increased from 11.4 percent in 2004 to 12.2 percent in 2005. The percentage of poor families in the working population increased from 40.6 percent to 43.1 percent. Nearly 60 percent of the ‘working-poor’ were working fulltime (Sinai 2006a, Shaoul 2006). 42 percent of Israeli Arab families are living below the poverty line. The average wages are less than half the wages of Ashkenazi Jews. Every second Israeli Arab child lives in poverty. When in 1996 to 2001 the unemployment rate of the Jewish Israelis increased by about 53 percent, the unemployment rate of the Arab Israelis increased by 126 percent (cf. Shaoul 2006). 80 percent of Israelis regard themselves as poor. 23 percent of the pensioners are living below the poverty line. Poverty among children increased in 1988 to 2005 by about 50 percent. Approximately one fifth of all under-age children (714.000) in Israel are suffering from hunger (cf. Shaoul 2006). 75 percent of the poor families cannot afford medicine and 70 percent are dependant on food donations (cf. Sinai 2005b). Nearly one third of the Holocaust survivors are living in poverty. Some of the Holocaust survivors get $ 600,- per month from the German government, whilst other Holocaust survivors receive only $ 350,- per month from the Israeli Ministry of Finance and the Holocaust survivors that immigrated to Israel after 1953 (who amount to 70 percent of the Holocaust survivors in Israel) only receive the general national pension. Nearly 20 percent of the Holocaust survivors are at the present time 86 years and older, 70 percent are older than 76 years. (cf. Medina 2007, p. 1) They are not entitled to a supplementary payment or to compensation. But the problematic economic situation of the Holocaust survivors is neither new information nor an unknown fact. As a result of the precarious situation several are in need of the help of welfare organizations, because they cannot afford to some degree their necessary medicine.

The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development

Cambodia's export-oriented garment industry has contributed greatly to poverty reduction in the country through employment of the poor. This paper provides a statistical verification of this contribution based on firm-level data from 164 sampled companies collected in 2003. Its main conclusions confirm the substantial impact that employment in the garment industry has had on poverty reduction in Cambodia. Firstly, entry-level workers receive wages far above the poverty line. Secondly, females make up the predominant share of the main category jobs in the industry. Thirdly, barriers to employment and to promotions up to certain job categories are not high in terms of education and experience. Another important finding is that a typical sample firm exhibited high profitability, although there was wide variation in profitability among firms. This average of high profitability could be a good predictor of Cambodia's viability in the intensified competition since the phase out of the Multi-Fiber Arrangement (MFA) at the beginning of 2005. A point of note is that Cambodia's pattern of industrial development led by a labor-intensive industry is similar to that of neighboring countries in East Asia which earlier went through the initial stage of industrial development, except that Cambodia has lacked a strong government industrial promotion policy which characterized the earlier group.

Clothing Export from sub-Saharan Africa : Impact on Poverty and Potential for Growth

Increases in clothing exports after 2000 signaled the first incidence of large-scale manufacturing exports from sub-Saharan Africa. Using firm-level information, this paper explores the potential of clothing exports for poverty reduction and further growth as seen in other low income countries. It shows that the garment exporting industries in Kenya and Madagascar have contributed poverty reduction in the short term by providing mass employment for female and less educated workers with wages beyond the poverty line. However, the long-term impact is not certain. High production costs and limited development of local firms weaken potential for further growth in the competitive world market. Upgrading of the market and improvement of efficiency are required to remain competitive for African industries, and governmental support for local participation are needed to facilitate technology transfer.

Income and poverty in a developing economy

We present a stochastic agent-based model for the distribution of personal incomes in a developing economy. We start with the assumption that incomes are determined both by individual labour and by stochastic effects of trading and investment. The income from personal effort alone is distributed about a mean, while the income from trade, which may be positive or negative, is proportional to the trader's income. These assumptions lead to a Langevin model with multiplicative noise, from which we derive a Fokker-Planck (FP) equation for the income probability density function (IPDF) and its variation in time. We find that high earners have a power law income distribution while the low-income groups have a Levy IPDF. Comparing our analysis with the Indian survey data (obtained from the world bank website: http://go.worldbank.org/SWGZB45DN0) taken over many years we obtain a near-perfect data collapse onto our model's equilibrium IPDF. Using survey data to relate the IPDF to actual food consumption we define a poverty index (Sen A. K., Econometrica., 44 (1976) 219; Kakwani N. C., Econometrica, 48 (1980) 437), which is consistent with traditional indices, but independent of an arbitrarily chosen "poverty line" and therefore less susceptible to manipulation. Copyright © EPLA, 2010.