This paper investigates the persistence of poverty over individuals' lifetimes using a hazard rate approach that accounts for multiple spells of poverty and incorporates spell duration, individual and household characteristics, and unobserved heterogeneity. The findings highlight the importance of considering multiple spells in an analysis of poverty persistence, with half of those who end poverty spells returning to poverty within four years. Accounting for multiple spells shows that approximately 50 percent of blacks and 30 percent of whites falling into poverty in some year will have family income below the poverty line in five or more of the next ten years.

Ann Huff Stevens is a professor of economics at Yale University. This paper has benefited from many helpful discussions with and comments from Gary Solon, Charles Brown, David Lam, Robert Moffitt, Rebecca Blank, and Marianne Page. Valuable feedback was provided by seminar participants at the University of Michigan, Yale University, and the National Bureau of Economic Research. The data used in this article can be obtained from the author beginning January 2000 through December 2003, at the Department of Economics, Box 208269, Yale University, New Haven, CT 06520.