Research Paper Working Papers of the ESRC Research Centre on Micro-Social Change 96-19
Changing places: income mobility and poverty dynamics in Britain
01 Oct 1996
This paper provides new evidence about income mobility and poverty dynamics in 1990s Britain using data from the first four waves of the British Household Panel Survey (BHPS). After describing our data and definitions used (Section 2), we document the degree and pattern of income mobility throughout the income range (Sections 3,4). Low income dynamics are the subject of Sections 5-7. Our analysis provides a longitudinal complement to the Department of Social Security's Households Below Average Income reports which are based on cross-national data and so cannot examine dynamics directly. We document the size of the persistent poverty problem, and identify the characteristics of those who experience it. We also investigate low income turnover: how many people are low income escapers and how many are low income entrants from one year to the next, and the proportion of the population which is touched by poverty over a given period. Low income exit and re-entry rates are also estimated. We describe the characteristics of those making transitions out of low income and those making transitions into low income, and investigate how these income changes are related to changes in household employment and demographic composition over the same period.