Why Some Households in Rural Bangladesh Stay Poor, While Others Move Out of Poverty: Key Findings

The Dynamics of Poverty in Rural Bangladesh

The study focuses on three key aspects of poverty in rural Bangladesh: poor households’ perceptions of what makes them poor; the factors that create and perpetuate their poverty; and the patterns of loss and gain that they directly experience.

The research draws on information collected from members of approximately 1,800 households, who were originally interviewed between eight and 14 years ago in 102 villages located in 14 of Bangladesh’s 64 districts. The researchers revisited the same households in 2006 and 2007 to assess the changes in poverty and well-being that occurred over time.

Unlike previous studies, this research integrates household survey data with individual life histories to provide a deeper understanding of the causes and solutions of chronic poverty in rural Bangladesh.

Perceptions of the Causes and Cures

  • The most important causes of decline cited in the Focus Group Discussions were dowry payments (50 percent), illness, including injury (48 percent), and too few income-earning household members.
  • The most commonly cited causes of improved life circumstances in the Focus Group Discussions were business activities (58 percent), improved agriculture (41 percent), access to microcredit (40 percent), and salaried work (39 percent).
  • Chronic poverty in rural Bangladesh can be addressed by focusing on improving and enhancing poor people’s access to business activities, improved agriculture, microfinance loans, salaried work, and labor migration (the last two often involving adult sons and daughters).

Determinants of Chronic Poverty

  • Households that are poorly educated, own less land, hold few non-land assets and livestock, and have young children and elderly people are more likely to be chronically poor. This finding highlights the importance of life-cycle and demographic factors in creating and transmitting poverty.
  • Shocks do not affect all households the same, and the overall impact of shocks depends on the household’s characteristics. For example, livestock deaths and division of property have the most negative impact for those households whose heads have less than four years of schooling.

Insights from Life Histories

  • Eight (out of a possible 12) life history trajectories emerged based on interviews with households. These trajectories had three directions (stable, improving, and declining) and four patterns (smooth, saw-tooth, single step, and multi-step). The trajectories demonstrate the significant impact of shocks to households and individuals, especially when these shocks are multiple and repeated.
  • Most of the life histories analyzed displayed a saw-tooth pattern in which improvements in people’s lives are reversed by shocks, such as illness/large medical expenses, wedding expenses, and legal disputes (court cases).
  • The interviews reveal that improvements in poor people’s lives tend to occur gradually, while declines tend to occur suddenly. A crisis is likely to produce serious and sudden declines when it either directly damages an aspect of a person’s well-being, such as their health, or when a person is vulnerable due to previous crises, has limited ability to insure against a future crisis, and/or holds low savings, few assets, and poor networks through which to access other resources.
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