Slipping into and Out of Poverty: the Dynamics of Spells

40 Pages Posted: 4 Aug 2000 Last revised: 13 Apr 2022

See all articles by Mary Jo Bane

Mary Jo Bane

Harvard University - Harvard Kennedy School (HKS)

David T. Ellwood

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Date Written: September 1983

Abstract

This paper examines the dynamics of poverty. Previous analyses of the dynamics of poverty have either examined only fluctuations in the male heads earnings or looked at the frequency of poverty periods over a fixed time frame. We argue that a more appropriate way to understand the dynamics of poverty is to define spells of poverty. Using this methodology we find that the majority of poor persons at any point in time are in fact in the midst of a rather long spell of poverty. The methodology also allows us to estimate the extent to which poverty spell beginnings and endings are associated with changes in income or changes in family structure. Less than 40 percent of poverty spell beginnings seem to be caused by a drop in the heads earnings,while 60 percent of endings occur when the head's earnings increase. As a result we argue that to understand the causes and potential remedies for poverty, researchers must focus on household formation decisions and on the behavior of so called secondary family members.

Suggested Citation

Bane, Mary Jo and Ellwood, David T., Slipping into and Out of Poverty: the Dynamics of Spells (September 1983). NBER Working Paper No. w1199, Available at SSRN: https://ssrn.com/abstract=238163

Mary Jo Bane

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-9703 (Phone)

David T. Ellwood (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1121 (Phone)
617-496-9053 (Fax)

National Bureau of Economic Research (NBER)

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