IZA DP No. 9334: Individual Poverty Paths and the Stability of Control-Perception
This paper investigates whether individual control-perception affects the probability of becoming poor, and vice versa, whether poverty experiences can be detrimental to these traits later on. The former relation is intuitive as control related traits underlay many idiosyncratic determinants of poverty. Though traits like control-perception are known to stabilize towards adulthood, the latter association may be plausible when some plasticity is maintained in case of more vigorous environmental influences like poverty. Such deterioration of control-perception would lead to poor people being literally "trapped". Yet, it is unclear what the underlying mediation paths are and whether control-perception or other potential factors are involved. Our empirical results suggest that poverty experiences affect individual control-perception to some extent. Despite rather modest magnitudes, the findings indicate that no invariance of control-perception is given in adulthood.