Predictors of Poverty Duration Among the Poor in Korea

Background and Purpose: Since Korea confronted the economic crisis in 1997, the number of poor people has increased sharply, along with the newly emerging, and rapidly growing, working poor population (Kim, 2005). However, poverty alleviation policies designed without in-depth study of poverty dynamics are generally very limited in effect. Regardless of such increasing attention and importance pertaining to poverty dynamics, little empirical knowledge exists on predictors of poverty duration among the poor. In response to this gap, the purpose of study is to examine predictors of organizational poverty duration among the poor in Korea. Accordingly, the research hypotheses are: 1) How do poverty dynamics appear after the economic crisis? 2) What are the predictors of poverty duration among the poor in Korea?

Method: Longitudinal data from six years of Korean Labor and Income Panel Study (KLIPS, 1998-2003) was used for testing the hypotheses. Through the criteria of eligibility for analysis, 577 household (2,182 individuals) were used. The majority was male householder (88.2%), The poor are defined as household whose family income is less than 60% of the median income. Poverty spell referred to the elapsed time from poverty origination to poverty event time and measured in years. this study did not examine those cases whose income's changes within 10% of the poverty threshold in order to avoid overestimating poverty transition (Jenkins, 2000). The study took into consideration right-censored spells while disregarding left-censored spells; if left-censored data spells were used in the life table analysis, poverty would be overestimated (Allison, 1997). Poverty rate, poverty gap, life table analysis were utilized so as to explore poverty dynamics. Discrete-time analysis was adopted to examine the predictors of poverty duration. Life table analysis and discrete-time analysis are advantageous that they can control the effects of the poverty spells on poverty exit rates.

Results: The findings showed that poverty rates were slightly decreasing, on the other hand, poverty gap was deepening consistently during 1998 to 2003. Most people who experienced poverty exit from poverty within 1.59 years. When repetitive poverty spells include in the analysis, poverty duration increase further to 1.77 years. Taken together, the findings revealed a high level of poverty exit rates. Using a life table analysis, the study demonstrated the negative relationship between poverty duration and poverty exit rates. Discrete-time analysis showed that type of household, age of householder, losing/gaining a job of householder, employment type of householder, poverty duration were the significant relationships with poverty duration.

Conclusion and Implications: The findings underscore the significance of the job quality as well as the losing/gaining a job. The findings imply that it is requisite to guarantee the job stability and the high quality of employment for the poor. The findings can draw implications for poverty alleviation policymakers of other countries as well as Korea in that poverty is common social problems all over the world.