June 1, 2007
The extent to which individuals living in low-income households at a point in time are simply experiencing transitory fluctuations in income, or are persistently experiencing low income, is clearly an important issue and one that can only be addressed using longitudinal data. The issues of income mobility and the extent of persistence of low incomes experienced by different groups are therefore addressed in this paper using data from the longitudinal British Household Panel Survey (BHPS). As in 2004/05, the 2005/06 edition of Households Below Average Income (HBAI) only presented trends for individuals who are persistently observed as living in low-income households, with a Website address directing to the full Low Income Dynamics (LID) paper. The information presented in this paper is based on analysis of fifteen waves of the BHPS, from 1991 up to and including 2005. This publication concentrates on low-income dynamics. It shows trends in relation to individuals who are persistently observed as living in low-income households and presents transition rates, that is, the likelihood of individuals to either enter or exit low income.