Income, Positional and Poverty Dynamics in Venezuela

The goal of this paper is to identify the sources of income, positional and poverty dynamics among Venezuelan households in the late nineties. The paper answers two fundamental questions: What are the factors associated with changes in income, relative position and poverty status among Venezuelan households in the late nineties? Are there relevant differences in these factors depending on whether they explain income, positional or poverty changes? First, education and employment of the head and non-head members are a recurrent factor associated to income, positional and poverty dynamics. Other sources of income, such as transfers and capital income, despite being imprecisely measured in the survey, show significance too. On the other hand, the effect of demographic factors is non-robust to changes in the definition of size-adjusted family income. Second we also detect relevant differences in these factors depending on whether they explain income, position or poverty changes. The effect of education in poverty transition is asymmetric: education, especially high school education, does help to escape poverty, but it does not prevent it. Also, transfers and capital income have a differential impact depending on the household initial position in the income distribution.