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Who Stays Poor and Who Doesn’t? An Analysis Based on Joint Assessment of Income and Assets

Published online by Cambridge University Press:  30 June 2022

JUN-HONG CHEN*
Affiliation:
Washington University in St. Louis, Brown School of Social Work, 1 Brookings Dr, St. Louis, MO 63130 emails: jun-hongchen@wustl.edu; haotian.z@wustl.edu
CHI-FANG WU
Affiliation:
University of Illinois at Urbana-Champaign, School of Social Work, 1010 W Nevada St, Urbana, IL 61801 email: cfangwu@illinois.edu
HAOTIAN ZHENG
Affiliation:
Washington University in St. Louis, Brown School of Social Work, 1 Brookings Dr, St. Louis, MO 63130 emails: jun-hongchen@wustl.edu; haotian.z@wustl.edu
*
Corresponding author, email: jun-hongchen@wustl.edu

Abstract

When designing programs to assist the poor, it is important to recognize who is most in need of government assistance. Although measures of poverty are often based on income alone, poverty measures based on both income and assets provide greater precision in the analysis of this group since accumulated assets can be liquidated to compensate for temporary shortfalls in income. The current study used the Panel Study of Income Dynamics (2007–2017) to analyze associations between different facets of poverty dynamics (i.e. poverty entry and exit) and its determinants. We explored differences in results based on whether poverty was measured by income alone, or income plus assets. The Cox proportional hazard regression was used to examine how demographic characteristics predicted poverty entry and poverty exit. Results indicated factors predicting poverty entry were not identical to those predicting difficulty of exiting poverty. Also, the risk of poverty entry and exit differed based on whether poverty was measured by income alone, or income plus assets. Thus, using income plus assets provides new perspectives into poverty dynamics which past research, based on income alone, did not provide. These new insights can be used to inform decisions about policies for poverty prevention and alleviation.

Type
Article
Copyright
© The Author(s), 2022. Published by Cambridge University Press

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Footnotes

Both Jun-Hong Chen and Chi-Fang Wu contributed equally and are co-first authors.

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