The distinction between chronic or extended duration poverty and transient poverty is
rarely made in the substantial literature on poverty in India. Determination of poverty
as chronic or temporary requires that the same households be tracked over time
through a panel data set and/or use of life or event history and other qualitative
approaches. This paper reviews the limited panel data based literature on chronic
poverty in India and a subset of the literature on other countries. It then uses panel
data that longitudinally track 3,139 households in rural India to try to identify and
understand the factors that influenced or constrained changes in poverty status over
time.
The paper analyses the impact of selected variables at the household, village and
district level on poverty incidence at each of the two points of time. It tries to identify
the characteristics of households that exhibit mobility into and out of poverty and of
those that simply stay poor. It also tries to understand the policy implications arising
out of differences in the importance of various factors in influencing chronic poverty
and exit from it.
In the next section of the paper, we present a review of some of the panel data based
literature on chronic poverty. In section III, we outline the approach we have taken to
the analysis in this study. Section IV presents the results of analysis and section V
concludes the paper.