Social Welfare Transfers and Poverty Transitions in Hong Kong: Evidence from Two-Wave Panel Data

Abstract

This study is the first attempt to examine poverty transitions and their correlates in Hong Kong, which has a high poverty rate despite being one of the world’s wealthiest societies. By classifying the respondents into pre-transfer non-poor, non-transfer poor, post-transfer non-poor and post-transfer poor, factors that were associated with the probability of moving out of (into) poverty due to the receipt (absence) of social welfare transfers were identified. The examination of poverty transitions with consideration for social welfare transfers has important implications on development of effective policies for poverty alleviation. Two types of factors were included: social stratification factors and life-course events. We draw data from the 2015 and 2017 Hong Kong Panel Survey for Poverty Alleviation. Binary and multinomial logistic regressions were used to examine factors associated with poverty transitions. The results showed that employment factors (number of employed household members and increased employment ratio) were the only factors that help people move out of poverty. Demographic factors (number of children in the household and increased dependency ratio) increased the risk of falling into post-transfer poor. Immigrants were more likely to transit from post-transfer poor to non-transfer poor. More policy efforts should be devoted to helping the working poor and single parent households, and to reducing stigma against immigrants receiving welfare benefits.