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ISER Working Paper Series 2015-16

Moving in and out of poverty in Mexico: What can we learn from pseudo-panel methods?

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Publication date

21 Jul 2015

Abstract

We estimate the magnitude of movements in and out of poverty in Mexico using repeated cross-sections between 1992 and 2012. Using the bootstrap, we explicitly compare results obtained with two pseudo-panel methods. Both pseudo-panel methods produce similar trends of mobility, the differences being mainly associated with the income correlation parameter. Calculations with true panel data show similar levels of mobility, despite data comparability issues. Our results suggest that an important fraction of the Mexican population moves in and out of poverty over short periods of time; and that the rate of poverty persistence seems to have declined considerably in the last decade. Substantial heterogeneity is found for specific groups of the population.

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