Vulnerability to poverty: Empirical findings

Poverty has been always studied in a world of certainty. However, if the aim of studying poverty is not only improving the well-being of whom is deprived today, but also preventing people from becoming poor in the future, a new, forward-looking perspective must be adopted. Since future distributions of outcomes are unknown, analyzing poverty in a world of uncertainty becomes essential. The literature has recently started studying uncertainty as a determinant part of poverty itself, referring to this issue as ‘Vulnerability to poverty’. World Development Report 2000/2001, for instance, underlines that: ‘poverty is more than inadequate income or human development, it is also vulnerability and a lack of voice, power, and representation Reducing vulnerability – to economic shocks, natural disasters, ill health, disability, and personal violence – is an intrinsic part of enhancing well-being’ (World Bank, 2001, p. 12). Vulnerability is a relatively young stream of the welfare economics literature. Although the idea of linking the economics of poverty with the economics of uncertainty dates back to the seminal work of Morduch (1994), almost all contributions were developed in the last decade, and only a few have been published to date in peer-reviewed journals.