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Understanding the relationship between inequalities and poverty: a review of dynamic mechanisms

Duque, Magali and Mcknight, Abigail (2019) Understanding the relationship between inequalities and poverty: a review of dynamic mechanisms. CASEpapers (217). Centre for Analysis of Social Exclusion, London School of Economics and Political Science, London, UK.

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Abstract

In this paper we examine the evidence on how dynamic mechanisms, which include earnings and income mobility, poverty dynamics, social mobility and the accumulation of risk and advantage over the lifecycle, may be a contributory factor behind the estimated positive correlation between income inequality and poverty. We find evidence that higher income inequality is related to greater income volatility, lower equalising mobility and lower social mobility. Research on poverty dynamics reveals evidence of poverty persistence, poverty traps and recurrent episodes of poverty. The evidence suggests that higher income inequality linked to lower income mobility, poverty persistence and churning is likely to lead to higher rates of poverty and, therefore, income and poverty dynamics are likely to be a contributory mechanisms behind the observed positive correlation in crosssectional measures of income inequality and poverty.

Item Type: Monograph (Working Paper)
Official URL: https://sticerd.lse.ac.uk/CASE/_new/publications/C...
Additional Information: © 2019 The Authors
Divisions: Centre for Analysis of Social Exclusion
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: I - Health, Education, and Welfare > I3 - Welfare and Poverty > I32 - Measurement and Analysis of Poverty
D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J62 - Job, Occupational, and Intergenerational Mobility
Date Deposited: 18 Feb 2020 10:03
Last Modified: 05 Sep 2020 23:08
URI: http://eprints.lse.ac.uk/id/eprint/103457

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