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How resilient are escapes out of poverty?

Working paper

Written by Andrew Shepherd, Lucy Scott

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Once a household has escaped poverty it is far from guaranteed that its members will continue to live at a level above the poverty line. Evidence from nine three-wave panel datasets (surveys that returned to interview the same household at three points in time) shows that at least 15% of households that escape poverty return to it in the future. In one case this proportion is 60%. 

Even if a household escapes poverty and remains out of it, this does not mean that its living standards continue to improve. In South Africa, households that remained out of poverty in wave three after having escaped it in wave two, on average, had continued to improve their situation. This though, is not the case in rural Ethiopia or Uganda. Education, and particularly having the second four years of primary education or more, emerges as extremely important to sustain poverty escapes, as does land.

A combination of policies is likely to be needed to achieve sustained escapes from poverty, while the context specificity of the events that contribute to poverty escape and sustained escape mean that a range of different policy responses are needed.

The working paper discusses a range of policies, including life-cycle investments in education, policies to secure access to land by the poorest people and local economic development policies all which can promote resilient poverty escapes and improve the quality of those escapes.

You can view the report here.

Lucy Scott, Katharina Hanifnia, Andrew Shepherd, Milu Muyanga and Elsa Valli