In-Work Poverty Across the Economic Cycle, Life Cycle, and Generations: Evidence from Ecuador, 2007–2022

This study examines the influence of age, cohort, and the economic cycle on the evolution of in-work poverty rates in Ecuador, using a pseudo-panel and an Age–Period–Cohort (APC) approach over the period 2007–2022. The results show that the life-cycle effect reveals a decreasing trend in in-work poverty, with increases during middle and old age. The analysis also indicates that the cohort effect decreases with younger generations, suggesting lower in-work poverty rates (IWPR) than their predecessors at the same age. The findings support the countercyclical nature of in-work poverty, showing a negative correlation between the period effect and the cyclical omponent of GDP. Additionally, the analysis reveals that, on average, structural disparities remain, particularly impacting informal workers, those with low educational attainment, rural residents, and agricultural workers. The results imply that labor poverty is a complex phenomenon, influenced by macroeconomic shocks, workers’ life cycles, and generational shifts. Furthermore, the behavior of these three factors varies substantially across worker groups, highlighting the need to account for this heterogeneity. Recognizing these differences is crucial for developing policies that not only address the structural causes of labor poverty but also account for the diversity in labor trajectories and economic conditions.