Finding out the Routes to Escape Poverty: The Relevance of Demographic vs. Labor Market Events in Spain

The knowledge of which events are most effective in pushing households out of deprivation should help in designing poverty‐alleviating social policy. Using longitudinal data for Spain, we analyze the nature of events pushing poor households out of poverty, adding an interesting decomposition of transitions: the occurrence of an event and the income change implied by it. We find that, similarly to other developed countries, the events that most help Spanish households in leaving poverty are related to changes in labor status of household members. However, non‐labor income changes are significantly more important in Spain than elsewhere.