Poverty transitions in nonremote indigenous households: the role of labour market and household dynamics

Using data from the Household Income and Labour Dynamics in Australia (HILDA) Survey, this paper estimates year-to-year poverty entry and exit rates for Indigenous and non-Indigenous individuals living in nonremote areas of Australia. Indigenous Australians of working age have a higher probability of entering poverty and a lower probability of exiting poverty than non-Indigenous people. Changes in household size are the biggest triggers of poverty entry and exit for Indigenous people, accounting for almost 50% of poverty entries and 40% of poverty exits. Changes in household size are more prevalent for Indigenous than non-Indigenous people, due partly to higher birth and partnering rates, and to the greater proportion of Indigenous people who live in dynamic extended-family or multifamily households. Indigenous people who experience changes in household size have a greater likelihood of entering poverty and a smaller likelihood of exiting poverty than non-Indigenous people.