Vulnerability to poverty: Theory

Cesar Calvo

No 409, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Two competing strands exist within the theoretical literature on vulnerability to poverty, each with its own policy implications. Vulnerability may be seen as low expected utility and thus stress the danger of self-perpetuating poverty, as the poor shy away from risky, yet necessary decisions to escape their hardship. Alternatively, vulnerability is often construed as expected poverty and provides policy-makers with a forward-looking viewpoint that both sheds light and raises new questions on how best to formulate the targeting of social spending. This paper provides an overview of the theoretical work underpinning each of these competing views.

Keywords: Poverty; vulnerability; risk aversion. (search for similar items in EconPapers)
JEL-codes: I3 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2016-09
New Economics Papers: this item is included in nep-upt
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Working Paper: Vulnerability to Poverty: Theory (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2016-409

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