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Poverty Persistence and Intra-Household Heterogeneity in Occupations: Evidence from Urban Ethiopia

Yonas Alem

No 580, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Previous studies of poverty in developing countries have to a great extent focused on the characteristics of the household head and used these as proxies for the underlying ability of the household to generate income. This paper uses five rounds of panel data to investigate the persistence of poverty in urban Ethiopia with a particular focus on the role of intra-household heterogeneity in occupations. Dynamic probit and system GMM regression results suggest that international remittances and labor market status of non-head household members are important determinants of households' poverty status. Results also show that controlling for these variables and the initial conditions problem encountered in non-linear dynamic probit models reduces the magnitude of estimated poverty persistence significantly for urban Ethiopia. These findings have important implications for identifying the poor and formulating effective poverty reduction and targeting strategies.

Keywords: urban Ethiopia; poverty persistence; dynamic probit; system GMM; labor market status (search for similar items in EconPapers)
JEL-codes: I32 R11 R20 (search for similar items in EconPapers)
Date: 2013-12-10
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