The Probability of Experiencing Poverty and Its Duration in Adulthood

Lloyd D. Grieger, University of Michigan
Sheldon H. Danziger, University of Michigan
Peter Gottschalk, Boston College

Using information from four decades of the Panel Study of Income Dynamics, we calculate the probability that an adult will experience a first poverty spell and the proportion of time spent in poverty. To disentangle the heterogeneity that may exist in the probability of ever experiencing adult poverty, we use survival analysis and regression techniques to estimate the hazard of falling into poverty and the proportion of time spent in poverty as a function of economic and demographic characteristics at age 25. We find that there is substantial heterogeneity in the hazard of ever falling into poverty and the proportion of time spent in poverty. The higher one’s income at age 25, the less likely one is to ever experience poverty during adulthood. There are similar large differences between the most-educated and least-educated, of whites and blacks and of men and women.