Working poverty, social exclusion and destitution: An empirical study

In economics destitution is traditionally interpreted as a product of labour market exclusion. Our work departs from the dominant models of poverty by considering destitution among a specific category of workers known as the working poor. Low wages and job insecurity in the informal sector in developing economies can create and perpetuate destitution among the working poor. Our precise contributions are three-fold: first, in order to understand causes and consequences of destitution, we develop an index of destitution from social exclusion of the working poor. Secondly, we test the predictions of this index by using micro-data collected from a sample survey in Bangladesh. Thirdly, from the micro-data we not only offer insights into the sources of destitution but also explain the factors that prevent the working poor from falling into the traps of destitution.