Poverty Dynamics Among Young Americans

This paper characterizes the nature of poverty from a dynamic life-cycle perspective. Using panel data from the National Longitudinal Survey of Youth, we find that 40% of young Americans experienced at least one year of poverty, and most of these experienced one or two years. A significant group, by age 34, had suffered five or more years of poverty out of thirteen. The overall poverty rate of 12.9% for this sample averages these different life-cycle paths. We investigate poverty transition rates and find an average annual outflow rate of 40% and an inflow rate of 6%.