Understanding Poverty Dynamics and Economic Mobility

Abstract

This chapter examines the conceptualisation and measurement of poverty dynamics and economic mobility (PDEM). Poverty dynamics refers to intra- or inter-annual changes in welfare that cause individuals or households to cross a fixed, but essentially arbitrary, poverty line from one time period to the next. Economic mobility refers to the longer-term process, usually taking decades, through which individuals or households change their relative positions in the entire welfare distribution. Although usually couched in income or expenditure terms, any quantifiable continuous measure of welfare can be used to operationalise these concepts. Studies of PDEM in developing countries are, however, severely handicapped by the dearth of long-term multiple-wave panel dates sets and an inability to link their results with in-depth qualitative investigations of economic mobility and the life course. This chapter argues that descriptive analysis and a Q-squared approach that combines panel surveys with life histories in an integrated and sequenced manner offers great potential for gaining a more nuanced understanding of PDEM. Such an approach provides opportunities for learning and triangulation of findings across disciplines and promotes a deeper understanding of the opportunities and challenges poor people face