DP1362 Poverty Dynamics Among Young Americans

Author(s): Simon Burgess, Carol Propper
Publication Date: March 1996
Keyword(s): Persistent Poverty, Poverty Dynamics
JEL(s): I32
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1362

This paper characterizes the nature of poverty from a dynamic life-cycle perspective. Using panel data from the National Longitudinal Survey of Youth, we find that 40% of young Americans experienced at least one year of poverty, and most of these experienced one or two years. A significant group, by age 34, had suffered five or more years of poverty out of thirteen. The overall poverty rate of 12.9% for this sample averages these different life-cycle paths. We investigate poverty transition rates and find an average annual outflow rate of 40% and an inflow rate of 6%.