Labor and poverty

As part of a study of characteristics of the poor and the ultra-poor at nutritional risks, this paper reviews the evidence on participation rates, duration of work, and rewards per period worked - both as they interact to form average labor income and as they vary in time and space. Labor markets impose interlocking and cumulative disadvantage on the poor: crude participation rates are reduced by high dependency ratios, illness, and other factors; as the poor increasingly rely on wage income, labor duration is cut by unemployment; and wage rates are kept low for the poor by lack of skills, of mobility, and of good health. These disadvantages interact, and fluctuations in participation rates, in employment, and in wage rates are positively correlated and worse for the poor. Other features over-represented among the poor are also correlated with lower participation rates, labor duration, and/or employment. The evidence indicates that redistribution of access to physical and human assets may be needed to enable poor people to compete fairly, even in perfect labor markets.