Households lacking emergency reserves see modest income shocks trigger cascading defaults, with children pulled from school during crises rarely returning even when conditions improve.

Evidence

The Poverty-Crisis Trap: Why Financial Crises and Poverty Reinforce Each Other (E-International Relations)

Categorization

• corroborated: 2 independent passages support this claim
• XREF: connects to: Extreme misfortune can have cascading negative effects on families. — Crews, Harry, A childhood the biography of a place, 21; Poverty traps arise when unanticipated shocks push households past a critical asset threshold, but welfare effects vary with shock magnitude rather than always cascading. — The Economics of Poverty Traps

Related

• Poverty traps arise when unanticipated shocks push households past a critical asset threshold, but welfare effects vary with shock magnitude rather than always cascading. (similarity 0.92)