Measuring the effect of spell recurrence on poverty dynamics—evidence from Spain

• Published in: Journal of economic inequality Vol. 10; no. 2; pp. 191 - 217
• Main Authors: Arranz, José María, Cantó, Olga
• Format: Journal Article
• Language: English
• Published: Boston Springer US 01-06-2012; Springer Nature B.V
• Subjects: Development Economics; Economic Growth; Economics; Economics and Finance; Income distribution; International Economics; Low income groups; Political Science; Poverty; Probability; Public Finance; Social policy; Studies; Time series; Spain; Recurrence; C41; I32; D31; Poverty dynamics; Multiple spells
• ISSN: 1569-1721; 1573-8701
• DOI: 10.1007/s10888-011-9191-2

Accounting for the time individuals spend below the poverty line is an important dimension in order to design social policies to fight against poverty. The literature is currently aiming to construct a consistent aggregate measure of poverty over time that takes into account individual income lifetime profiles. It is however, far from clear which aspects of the specific patterns of poverty spells should be included. Using longitudinal data for Spain, this paper shows that the effect of spell recurrence on poverty dynamics is relevant. Poverty exit and re-entry rates vary not only with personal or household characteristics but also with spell accumulation and the duration of current and past spells. In general, our main findings support that an aggregate intertemporal poverty index should incorporate full individual poverty lifetime trajectories accounting for both poverty and non-poverty spell durations.