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KMID : 1124020100260030025
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Korean Social Security Studies
2010 Volume.26 No. 3 p.25 ~ p.47
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Poverty Transition and Income Change of Low Income Households in
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Seok Sang-Hun
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Abstract
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This study utilizes the Korea Welfare Panel Study (KOWEPS) conducted by Korea Institute for Health and Social Affairs. Data from the first three waves of KOWEPS were used to formulate the process of changing income distribution in low-income group, in order to examine its determining factors. The analysis using the nonparametric decision tree model produced the following results. First of all, the fall of middle class and fixation of poverty were detected as a case of income mobility. The middle class has seen intensive downwards movements of income quantiles during the three years, whereas the low-income class had a comparatively high rate of being stuck in the same income quantile. Secondly, the income level of long-term poverty group remains to be around 60% of the poverty line, whereas the initial income of poverty exit group around 70%. The increase in earned income that exceeds the 140% of poverty line seems to indicate the complete exit from such poverty groups. However, when the increased income merely hovers around 120% of poverty line, there is a high risk of subject’s re-entry into poverty groups. Lastly, the number of the employed was the most influential variable in determining dynamic changes of poverty. The change in employment status of the head of households was the next most influential factor. These analysis results show the high possibility of the repeated poverty, caused by the discontinuation of employment and income that in turn, result in long-term poverty. This also suggests the need of fundamental solution such as employment support and institutional devices to prevent the decrease in job quality and creation of jobs with appropriate income guarantees, as well as income supports.
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KEYWORD
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low income households, income change, poverty transition, decision tree model
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