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Structural and stochastic transitions of poverty using household panel data in India
Author(s) -
Dutta Swati
Publication year - 2021
Publication title -
poverty and public policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.206
H-Index - 4
ISSN - 1944-2858
DOI - 10.1002/pop4.299
Subject(s) - poverty , economics , panel data , demographic economics , caste , multivariate probit model , tribe , development economics , socioeconomics , economic growth , econometrics , sociology , political science , anthropology , law
Abstract The paper examines whether the poverty transition or poverty persistency in India, as well as in Indian rural states, is due to state dependence or unobserved heterogeneity. Using panel data from the India Human Development Survey for 2005 and 2012, the study found that structural chronic poverty is high in Bihar, Odisha, Maharashtra, and Uttar Pradesh. Furthermore, general caste and scheduled tribe households have achieved upward mobility due to structural reasons whereas other backward class households have made a stochastic transition and come out of poverty. The bivariate Probit model suggests that there exists a state dependence of the probability of being poor; meaning that past poverty experience does matter in determining the present poverty status of a given household in India. The findings also indicate that female education is one of the important indicators for moving out of poverty. Hence, a crucial policy decision is needed for reducing poverty in a more sustainable way, which will include a targeted social safety net program along with improving the skill level of the household.