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Events that Trigger Poverty Entries and Exits


  • *Direct correspondence to Dr. Caroline Ratcliffe, Senior Research Associate, The Urban Institute, 2100 M St. NW, Washington, DC 20037 〈〉. Upon request, the corresponding author will share all data and coding information with those wishing to replicate the study. This research was supported by a Census-funded grant from the Joint Center for Poverty Research Development Grants Program and is based on work funded by the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation under Contract HHS-100-99-0003. The authors thank the anonymous referees and the editor for helpful comments. They also thank Stephanie Riegg, Emily Rosenberg, Yasmeen A. Salahuddin, and Kristen Erwin for their excellent research assistance. Laura Chadwick, Susan Hauan, Don Oellerich, Julia Isaacs, Robert Lerman, and Douglas Wissoker provided excellent comments and advice. This article also benefited from comments received from Steven Haidar and participants at the 2002 Econometric Society Meetings, from participants of the George Washington University Labor Studies Workshop, and from participants at the JCPR/Census Bureau Research Development Grants Conference. The views expressed are solely those of the authors and should not be attributed to the JCPR, U.S. Department of Health and Human Services, the Urban Institute, its trustees, or its funders. All errors are the responsibility of the authors.


Objective. This article examines how events—such as changes in household composition, employment status, disability status, and economic conditions—affect poverty entries and exits. We also examine whether the role these events play in poverty transitions differs in the pre- and post-welfare-reform periods.

Methods. The analysis uses discrete-time multivariate hazard models along with monthly, longitudinal data from the 1988, 1990, and 1996 panels of the Survey of Income and Program Participation (SIPP).

Results. Analyses show that many events are related to the likelihood of entering and exiting poverty. Of the trigger events examined, individuals living in households that experience a loss or gain of employment are the most likely to enter and exit poverty. We also find that changes in employment are more important in the 1996 to 1999 time period—after welfare reform—than in the 1988 to 1992 time period—prior to welfare reform. Finally, changes in household composition, disability status, and educational attainment are found to play a role in throwing people into poverty and helping them exit from poverty in both time periods.

Conclusions. There is no single path into or out of poverty, suggesting that multiple policies can be considered to help alleviate poverty.