Transient, Chronic, and Intergenerational Poverty: Evidence from the Cebu Longitudinal Health and Nutrition Survey

This paper examines poverty dynamics in the Philippines by decomposing poverty into its transient and chronic components using censored fluctuation approaches. Findings reveal that aggregate squared poverty gap is mostly transient. Using censored quantile regression, the paper then identifies the following as significant correlates of transient poverty: location of residence, household dependency burden, mother’s age, and work in the farming sector. Transient poverty is also linked with single-person headed households. Meanwhile, significant correlates of chronic poverty include work in the farming sector and number of years of mother’s education Households with heads who are regular wage earners and who are contractual workers experience more chronic poverty than households with heads who are self-employed. Once we extend our model to account for intergenerational poverty, we find that estimated elasticity between parent and child’s income ranges from 0.165 to 0.197 suggesting that moderate income rigidity exists between two generations.