Budapest Working Papers on the Labour Market BWP - 2000/1
The paper considers child poverty in Hungary, a country at the forefront of the transition process. We investigate how household characteristics are associated with the incidence, persistence and dynamics of poverty among children in Hungary, looking at the years 1992-96. We find that children have moved down the income distribution, moving from a situation of being underrepresented in the poorest fifth of the population in 1992 to being overrepresented in 1996. Poverty is persistent for some children, but is experienced temporarily by many. The poverty rate among children, defined as the proportion of children falling into the bottom fifth of the income distribution, was 10 percent in any year from 1992 to 1996, but 44 percent of children were found poor at least once. Considering the role of the households' position in the labour market we found that the importance of work to avoid being poor rose over the period. The results also show that changes in the number of workers in the household are often associated with a shift in the probability of entering or leaving poverty, but the majority of entries and exits take place with no such changes occurring. This emphasises the importance of explanations other than job loss or gain.