Why Poverty Persists
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Why Poverty Persists

Poverty Dynamics in Asia and Africa

Edited by Bob Baulch

This edited book analyses what traps people in chronic poverty, and what allows them to escape from it, using long-term panel surveys from six Asian and African countries. The distinguishing feature of these studies, which were commissioned by the Chronic Poverty Research Centre, is they span longer periods or have more survey waves than most developing country panels. This allows a detailed account of the maintainers of chronic poverty and drivers of poverty dynamics. Many of the studies (from Bangladesh, Ethiopia, Nepal, Pakistan, South Africa and Vietnam) are written by leading development economists, and all pay careful attention to the difficult issues of attrition, measurement error and tracking. The book’s comparative perspective highlights the common factors which cause people to fall into chronic poverty and allow them to break-free from it. A number of promising policies and interventions for reducing chronic poverty are identified.
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Chapter 6: Poverty Traps and Structural Poverty in South Africa: Reassessing the Evidence from KwaZulu-Natal, 1993 to 2004

Julian May, Ingrid Woolard and Bob Baulch


Julian May, Ingrid Woolard and Bob Baulch BACKGROUND AND OBJECTIVES In this chapter panel data are used to investigate chronic and structural poverty in South Africa. The KwaZulu-Natal Income Dynamics Survey (KIDS) spans the first decade of the post-apartheid era, with the first wave having been collected just prior to the transition to democracy and the third wave in 2004. Using the first two waves of KIDS (1993 and 1998), Carter and May (2001) suggest the existence of an asset-based poverty threshold in South Africa as a position from which an escape from poverty may be impossible notwithstanding the significant structural changes introduced during the first half of this period. Also using these data, Woolard and Klasen (2005) identify four types of poverty traps that might account for this: large initial household size, poor initial education, poor initial asset endowment and poor initial employment access. Using a third wave of data collection, in this chapter we test whether the findings of the earlier work have been borne out or whether new dynamics have come into play. More specifically, we examine whether the description of structural poverty and poverty traps above can still be observed in the 2004 wave of the KIDS data. We then explore whether the nature of poverty traps in KwaZulu-Natal has undergone change in the period 1998 to 2004 compared with the period 1993 to 1998. Finally, we consider if, in the longer term, previously observed trends of structural poverty have been reversed and, if so, who...

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