Combining the Intensity and Sequencing of the Poverty Experience: A Class of Longitudinal Poverty Indices

Abstract

Summary Traditional measures of the persistence of poverty do not devote enough attention to the sequence of spells of poverty. We propose a new class of indices which measures the severity of chronic poverty, taking into account the way in which spells of poverty and non-poverty follow one another along individual life courses. All the years spent in poverty concur with the measurement of the persistency of poverty, albeit with a decreasing contribution provided that the distance between two consecutive spells of poverty becomes longer. Moreover, the distance from the poverty line and the poverty persistence probabilities are explicitly taken into account. A macrolevel index, which allows comparisons across nations and accounts for the mobility in the national income distributions, is also provided and it is used to explain the differentials of persistence of poverty among young European adults.