The distinction between chronic or extended duration poverty and transient poverty is rarely made in the substantial literature on poverty in India. Determination of poverty as chronic or temporary requires that the same households be tracked over time through a panel data set and/or use of life or event history and other qualitative approaches. This paper reviews the limited panel data based literature on chronic poverty in India and a subset of the literature on other countries. It then uses panel data that longitudinally track 3,139 households in rural India to try to identify and understand the factors that influenced or constrained changes in poverty status over time.
The paper analyses the impact of selected variables at the household, village and district level on poverty incidence at each of the two points of time. It tries to identify the characteristics of households that exhibit mobility into and out of poverty and of those that simply stay poor. It also tries to understand the policy implications arising out of differences in the importance of various factors in influencing chronic poverty and exit from it.
In the next section of the paper, we present a review of some of the panel data based literature on chronic poverty. In section III, we outline the approach we have taken to the analysis in this study. Section IV presents the results of analysis and section V concludes the paper.
Chronic Poverty in Rural India, An Analysis using Panel Data: Issues andFindings, CPRC-IIPA Working Paper No. 15, Chronic Poverty Research Centre (CPRC), Manchester, UK, 29 pp. [This paper has been published as a chapter in the book entitled Chronic Poverty and Development Policy in India, edited by Aasha Kapur Mehta and Andrew Shepherd, Sage Publicatiions, India, 2006, ISBN 0-7619-3464-2, 408 pp.]