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Why Poverty Persists by Agnes Quisumbing


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Why Poverty Persists Policy Seminar at IFPRI on 30 May 2012; presentation by Agnes Quisumbing.

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Why Poverty Persists by Agnes Quisumbing

  1. 1. Poverty transitions, shocks, andconsumption in rural Bangladesh, 1996-97 to 2006-07 Agnes Quisumbing Poverty, Health, and Nutrition Division International Food Policy Research Institute
  2. 2. Introduction• Bangladesh → impressive reductions in poverty in the last decade• Population living in poverty: fell from 51% in 1995 to 40% in 2005 (BBS 2006)• Substantial improvements in non-monetary indicators of the poorest (Sen and Hulme, 2006).• However, more than 36 million people live below the food poverty line (BBS, 2006)• Reducing poverty—and lifting the extreme poor out of poverty—remains a major development challenge
  3. 3. Casual observation suggests that there have been many changes over the past decade…
  4. 4. And some of these changes are more subtle…but quite important
  5. 5. Some individuals/households have clearly been able to move out of poverty, and others, not.Why are some peoplestill in poverty, whileothers been able tomove out?
  6. 6. Understanding poverty dynamics in rural BangladeshWe use data from the CPRC-DATA-IFPRI longitudinalstudy (1996/97 to 2006/07) to: – estimate poverty transition categories (chronic poor, moving up, falling into poverty, never poor) – analyze the determinants of belonging to a given poverty transition category – analyze the determinants of per capita consumptionWe take into account the role of initial householdcharacteristics and shocksWe also draw on qualitative work undertaken prior to thesurvey, and after the survey, to enrich our interpretation ofresultsData available at:
  7. 7. Poverty and poverty transition categories Agricultural technology (1996-2006)Poverty headcountPoverty in baseline survey 62%Poverty in 2006/2007 13%Poverty transitionsChronic poor 11%Falling into poverty 2%Moving out of poverty 51%Never poor 36%
  8. 8. Initial household characteristics affect chronic poverty and hh consumption• The probability of chronic poverty is negatively associated with schooling & the value of non-land assets• Higher proportions of young children and older people are also associated with being chronically poor and lower per capita consumption
  9. 9. Most common shocks experienced by households over the last 10 years, 1996-2006
  10. 10. Shocks also affect chronic poverty and household consumption• Death of the main income earner and illness-related income loss have the biggest negative impact on per capita consumption• Floods are not significant —possibly because of effective emergency assistance mechanisms
  11. 11. The double whammy Life histories interviews are useful both for triangulating the poverty transitions observed in the household survey data and for understanding the drivers of consumption changes and movements into and out of poverty. Life histories showed that the combination of dowry expenses and illness expenses (associated with aging parents) pushed households into chronic poverty
  12. 12. Policy implications--1• Need for policy interventions to increase access to and improve quality of education• Need to provide poor with opportunities to build up and trade up assets and protect asset base from shocks• Required protection from shocks may differ for men and women: women’s assets tend to be drawn down by illness shocks
  13. 13. Policy implications--2• How to address issue of dowries and illness shocks• Addressing dowries is controversial, although worldwide dowries have tended to decline as investments in girls’ human capital increase (can we wait?)• Providing instruments to cope with illness is less controversial (microinsurance)• NGOs and civil society organizations may pave the way in changing gender norms around dowries, and in providing ways to manage risk