Measuring Poverty Cycles in the U.S. 1959–2013

Abstract

This paper aims to shed light on the nature of poverty as a dynamic process by examining poverty cycles, their magnitudes, and their asymmetry. The designated benchmark country is the USA due to the availability of time series data making comprehensive analyses possible. We use Harding and Pagan (2002) and the Cardinale and Taylor (2009) model to isolate poverty cycles in the U.S. during 1959–2013. Once isolated, we test the poverty cycles for duration dependency, and their synchronization with the U.S. business cycles observed over the same period. We find that poverty dynamics measured through poverty cycles differ for alternative poverty rate indicators. Another critical point is the magnitude of change in the poverty cycles. Prolonged and more volatile poverty cycles have a significant adverse impact on people and families facing them. That is particularly important for policymakers who should rethink poverty policy guidelines aimed at helping people with more volatile poverty cycles first. Our is the first study, to our knowledge, to isolate poverty cycles and focus on their nature. Poverty cycles should attract more attention from policymakers since they more accurately assess nations’ economic well-being than output (GDP).

The impact of poverty cycles on economic research: evidence from econometric analysis

“…Driven by business cycles, the emergence of poverty is also apparently cyclical. This was confirmed in a study by Skare et al (2018). Once poverty cycles occur, it tends to have an impact on many aspects of social development, like economic crises, insufficient public services and social exclusion (Bourguignon & Chakravarty, 2003;Zhou & Liu, 2019) .…”

“…Therefore, an appealing argument is put forward in this paper: poverty cycle theory evolved from business cycle theory, and just as business cycle theory evolved from crisis theory (Schiaffino et al, 2017). Skare et al (2018) also reported this finding, business cycles and poverty cycles are two faces of the same coin. Since then, the research on 'income' has remained high and always been in the top three ranks.…”

“…However, another critical economic phenomenon (i.e., poverty cycles) has rarely been mentioned and noticed. Like business cycles, as a cyclical phenomenon in economic growth, time dependence, asymmetry, and a clear pattern are the dominant features of poverty cycles ( Skare et al, 2018). Currently, how to break poverty cycles seem to be the central thesis of discussion.…”

“…For instance, a microfinance architecture could be developed to fight poverty cycles (Garrity & Martin, 2018;Khan et al, 2017). Of course, the identification and measurement of poverty cycles are also a significant research perspective (Niu et al, 2020;Skare et al, 2018). Also, there exists a tremendous amount of literature attempting to detect causality or connection between poverty crises and other events.…”

Examining Multilevel Poverty-Causing Factors in Poor Villages: a Hierarchical Spatial Regression Model

“…Many experts and scholars have attempted to explore the causes of poverty from different views using different methods (Carneiro et al, 2016;Wang & Qian, 2017;Aristondo, 2018;Skare et al, 2018;Boemi & Papadopoulos, 2019). These existing studies have been mostly based on traditional single-level linear or spatial statistical regression models, such as orthogonal least squares (OLS) regression, least squares regression, multiple linear regression, and spatial regression models (Behruz et al, 2014;Guo et al, 2018;Peirovedin et al, 2016;Thongdar et al, 2012).…”