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Poverty dynamics and vulnerability during a growth episode: Evidence from Bangladesh: 2000 – 2016

The recent Covid-19 pandemic has affected the livelihoods of millions of households across the globe to the point of offsetting years of progress in global poverty reduction (Mahler et al., 2022). Thereby, the pandemic has brought concerns related to vulnerability and the resilience of gains in poverty reduction to the forefront of the academic, public and policy discussion.

Does economic growth enable households to move out from deprivation permanently? Do chronically poor households also benefit from it? How does it modify the profiles of households in transient and persistent poverty?

This study aims to contribute to the evidence base underlying these discussions by conducting a detailed analysis of household-level dynamics of poverty and vulnerability in Bangladesh, a country often singled out as a successful development story. To overcome existing data limitations, we apply synthetic panel methods to the four available waves of the Household Income and Expenditure Surveys available.

We find that:

  • over 10% less of the Bangladeshi population suffers from persistent
    poverty by the end of the study period than around the start of the century. This
    progress is mainly driven by rural areas, where the share of secure population has as
    well notably expanded.
  • In urban areas, the reduction in both persistent as well as transient poverty has been more muted, especially since 2010, and mainly translated into increasing vulnerability.

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