Introduced by Bane and Ellwood in their classical poverty study, the concept of poverty dynamics embraces two important components, poverty duration and poverty recurrence. Poverty duration refers to the time period for which poor people stay on poverty status. Poverty recurrence refers to the total number of poverty incidences individuals experience in a given time period. For a typology model, we incorporated these two components as the main criteria. Therefore, the typology model of this study posits that varying patterns of the poor represent distinct case profiles, not only in terms of the severity of poverty incidences, but also in terms of the frequency. As such our typology model provides a more textured explanation of poverty experience. We analyzed 2,584 households from the Korean Labor & Income Panel Study, nine-year longitudinal data from 1997 to 2005. We identified different poverty types by employing the technique of "cluster analysis." Based on the results of cluster analysis we used multinomial logistic regression to investigate differences in the characteristics of each type of poor.
Cluster analysis identified three types of the poor, namely, chronic, episodic, and transitional poor. The “chronic poor” had a single poverty incidence during the nine-year period, yet the average poverty duration was as long as 7.1 years. In contrast, the “episodic poor” experienced the highest number of poverty incidences (3.1 episodes) but the shortest average poverty duration (1.4 years). In comparison to these groups, the “transitional poor” had an average of 1.1 poverty incidences and average poverty duration of 1.6 years. The multinomial logistic regression indicated that childhood poverty experience, age and health of household heads, and employment type are significant factors in determining the types of the poor.
The findings of the study revealed that there are significant differences among the poor which need to be taken into account for effective policy implementation. Based on the empirical findings, we suggested three policy directions for more efficient anti-poverty strategies.