Events That Trigger Poverty Entries and Exits. JCPR Working Paper.

This paper uses a discrete-time multivariate hazard model and longitudinal data from the Survey of Income and Program Participation to examine how events affect poverty entries and exits and how these events have changed over time--from the pre-welfare reform period to the post-reform period. It also uses monthly state unemployment rate data from the U.S. Department of Labor and quarterly real gross domestic product data from the Department of Commerce. Results find no single path into or out of poverty. Changes in household composition, disability status, and especially labor supply are important events for entering and exiting poverty. A comparison of the 1988-1992 and 1996-1999 time periods shows both similarities and differences. Changes in employment are more important in the recent 1996-1999 time period, after federal welfare reform and during a booming economy, than in the 1988-1992 time period, prior to welfare reform. In addition, shifts from two-adult to female-headed households and vice versa, measured while controlling for shifts in employment, became less important in poverty transitions over this time period. (SM)