Transition Events in the Dynamics of Poverty. Summary of Literature Review Findings

09/01/2002

Results from the literature can be summarized into the following key findings:

Probabilities Associated with Entries into, Exits from, and Reentries into Poverty

  • Analyses with SIPP data from the early 1990s find that the poverty entry rate for the total U.S. population was about three percent per year and poverty exit rate for the total U.S. population was about 23 percent per year.
  • About one-half of adults will experience poverty by age 65.
  • The longer a person has been poor, the less likely it is that he or she will escape poverty.
  • Poverty reentry rates are relatively high. More than one-half of those who escaped poverty will return to poverty within five years.
  • Blacks, Hispanics, female-headed families, persons with low levels of education, and children are vulnerable to poverty.

Events Associated with Entries into and Exits from Poverty

  • Changes in labor supply and/or earnings are identified as the major events associated with transitions into and transitions out of poverty.
  • Female headship is also related to transitions into and out of poverty. Roughly one-quarter of female-headed households exit poverty because of a shift to a male-headed household.
  • Black children are more likely than white children to enter poverty when the household shifts from two-adult headed to female-headed.

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