Climbing up the Ladder and Watching Out for the Fall: Poverty Dynamics in Rural Bangladesh

This paper analyses poverty dynamics in rural Bangladesh using a nationally representative panel dataset of 5,020 rural households interviewed in 2011/12, 2015, and 2019. Findings show that education, savings, assets, international remittance, non-farm employment, substantial safety net transfers, and women’s empowerment are key factors in breaking chronic and transient poverty. Rural infrastructure development and market access through improved connectivity are also critical for sustained poverty alleviation. On the other hand, woman-headed households (widowed, divorced or abandoned) are found to be particularly vulnerable to impoverishments. The results are consistent across multinomial logit, simultaneous quantile regression, and panel fixed effects models. Thus, policies and programs that address the determinants of chronic and transient poverty identified in this study hold promise for sustained poverty reduction in rural Bangladesh.