The dynamics of poverty : why some
            people escape from poverty and others don't - an
            African case study
Empirical investigations of poverty in
            developing countries tend to focus on the incidence of
            poverty at a particular point in time. If the incidence of
            poverty increases, however, there is no information about
            how many new poor have joined the existing poor and how many
            people have escaped poverty. Yet this distinction is of
            crucial policy importance. The chronically poor may need
            programs to enhance their human and physical capital
            endowments. Invalids and the very old may need permanent
            (targeted) transfers. The temporarily poor, on the other
            hand, may best be helped with programs that complement their
            own resources and help them "bridge" a difficult
            period. Results from analyses of panel surveys show
            significant mobility into and out of poverty and reveal a
            dynamism of the poor that policy should stimulate.
            Understanding what separates chronic from temporary poverty
            requires knowing which characteristics differentiate those
            who escape poverty from those who don't. In earlier
            work, the authors found that region of residence and
            socioeconomic status were important factors. In this paper
            they investigate the role of other household
            characteristics, especially such asset endowments as human
            and physical capital, in the case of Cote d'Ivoire. In
            urban areas of Cote d'Ivoire, human capital is the most
            important endowment explaining welfare changes over time.
            Households with well-educated members suffered less loss of
            welfare than other households. What seems to have mattered,
            though, is the skills learned through education, not the
            diplomas obtained. Diplomas may even have worked against
            some households in having oriented workers too much toward a
            formal labor market in a time when employment growth came
            almost entirely from small enterprises. In rural areas,
            physical capital - especially the amount of land and farm
            equipment owned - mattered most. Smallholders were more
            likely to suffer welfare declines. Households with
            diversified sources of income managed better, especially if
            they had an important source of nonfarm income. In both
            rural and urban areas, larger households suffered greater
            declines in welfare and households that got larger were
            unable to increase income enough to maintain their former
            welfare level. Households whose heads worked in the public
            sector maintained welfare better than other households, a
            finding that confirms earlier observations. The results also
            suggest that government policies toward certain regions or
            types of household can outweigh the effects of household
            endowments. Surprisingly, migrant non-Ivorian households
            tended to be better at preventing welfare losses than
            Ivorian households, while households headed by women did
            better than those headed by men (after controlling for
            differences in or changes in endowment). The implications
            for policymakers? First, education is associated with higher
            welfare levels and helps people cope better with economic
            decline. Second, targeting the social safety net to larger
            households - possibly through the schools, to reach children
            - is justified in periods of decline. Third, smallholders
            might be targeted in rural areas, and ways found to
            encourage diversification of income there.