Journal Economic Inequality: Measuring Poverty Over Time (journal special issue)
People often move in and out of poverty, and the length of time spent in poverty can vary widely, likely affecting prospects of escaping and staying out of poverty. Current poverty measures do not account for these aspects. Should they? Are there sound theoretical foundations for shifting towards more complex lifetime measures of poverty that are backed by empirical evidence? Furthermore, if data limitations prevent us to implement this new approach for the time being, are there imputation methods that can accurately fill the data gaps in the meantime?
The conceptual limitations of the static 'snapshot' approach to poverty measurement have long been recognized, giving rise to the distinction between chronic and transitory poverty and the development of accompanying measures. When the chronic and transient components of poverty are distinguished, attention usually focuses on the average consumption shortfall or the proportion of time spent in poverty across a person's lifetime, ignoring the sequencing and duration of poverty spells. From this perspective, a person having spent the first half of their life in poverty, a person having spent the last half of their (equally long) life in poverty, and a person having spent half their life in poverty in total, though with poverty spells alternating with non-poverty spells, would be equally poor and would be assigned equal degrees of chronic and transient poverty. This is questionable. Long periods in poverty may cause permanent damage (and thus affect a person's poverty prospects) in a way that cannot be properly captured by the snapshot and components approach to poverty measurement. The timing of consumption shortfalls during a person's lifecycle may also matter, with early childhood poverty proving to be especially detrimental in terms of cognitive development as well as the person's future earnings profile. It is argued that both the duration and sequencing of...