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Determinants of households’ income mobility and poverty dynamics in Egypt

Citation

Marotta, Daniela & Yemtsov, Ruslan (2010). Determinants of households’ income mobility and poverty dynamics in Egypt.

Abstract

Rapid economic growth in Egypt over 2005-2008 followed by deceleration over 2008-2009 produced considerable distributional changes. This paper investigates household income mobility in these two sub-periods, following mostly the approach by Woolard and Klasen (2004) and Field et al (2002 and 2003) applied to South Africa panel data. The paper finds that different groups of households were affected differently by growth and inflation and then by deceleration of the economy and remittances. Among key events which affect households’ movements into and out of poverty demographic changes play a major role, followed by changes in private transfers. Labor market events linked to longer-term factors are only weakly influencing these movements. Our findings suggest very high instability of incomes and short-term fluctuations around households’ income trajectories. A significant part of the pro-poor dynamics measured with panel data represents simple corrections of the short-term idiosyncratic shocks. At the same time, we find evidence of poverty traps which explain chronic poverty persistence and worsening extreme poverty in Egypt despite robust and sustained growth. These results appear robust to measurement errors.

URL

http://www.iza.org/conference_files/worldb2010/marotta_d6001.pdf

Reference Type

Conference Proceedings

Year Published

2010

Author(s)

Marotta, Daniela
Yemtsov, Ruslan