Poverty in Sweden 1991-2007. Change, dynamics, and intergenerational transmission of poverty during economic recession and growth

Summary • Has poverty increased or decreased in Sweden during the last two decades? The answer to this question depends on the definition of poverty. In relative terms poverty has increased due to increasing income differences. • Between 5 and 11 per cent of the population ended up in absolute poverty between 1991 and 2007. The proportions were much higher for those living alone, for young adults, and for immigrants, particularly those newly arrived. • Half of the poor leave poverty already the year after entry. The group of poor therefore is composed to a large extent by those who are long-term poor. For those who have once been poor, the risk is high to return to poverty. • Poverty is strongly associated with economic recession and growth. When the macroeconomic conditions are favourable fewer become poor and the persistence in poverty decreases. • Long-term poverty, defined in absolute terms, has decreased but become more concentrated to those living alone and to immigrants. Among immigrants, persistence is higher than among those born in Sweden. • An individual’s incomes and risk of poverty are associated with the household incomes during childhood. Those who grow up poor have excess risks for ending up poor as adults. The probability of ending up as high-income earners is much higher for those who grew up under such advantaged conditions themselves as compared to others. • Intergenerational income mobility increased between 1995 and 2005, approximately, but whereas inequality of opportunity thus decreased the economic consequences of the income background grew