The Dynamics of Poverty in ChileReport as inadecuate

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This paper uses the 1996–2001 National Socioeconomic Survey paneldatabase to analyse poverty dynamics in Chile, drawing a distinction betweenchronic and transient poverty. We found that while 20 per cent of the populationwas living below the official poverty line both in 1996 and 2001, only 9 per cent ofthe population was poor at both dates. We also found that when the poverty line wasraised, the amount of households which could be considered chronically poor rosesteadily, whereas the transitory component of poverty remained more or less stable.Analysis of the direct reasons for changes in household poverty status leads us to theconclusion that labour dynamics are far more relevant than demographic changes.Household heads who suffered health problems are significantly less likely to leavepoverty. Household human and physical capital are also relevant, as well as thesector in which the household head works. Simulating this exercise using differentpoverty lines reveals that some variables are not robust to changes in the definitionof poverty, while others which originally appeared to be insignificant become so formost other possible poverty lines.

Author: Contreras Guajardo, Dante; - Neilson, Christopher; - Hermann Anguita, Jorge; - Cooper, Ryan; -



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