June 1, 2003
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).
Last year’s Low Income Dynamics paper was the first standalone release. Previously the analysis was first published as a chapter of the Households Below Average Income (HBAI) annual report. Due to improvements in the timeliness of the availability of Family Resources Survey (FRS) data, the analysis of which forms the bulk of the HBAI report, it is no longer possible to include the analysis of the latest wave of BHPS in the HBAI report. Therefore, in line with National Statistics good practice to make statistics available at the earliest opportunity, we have taken the decision to release this analysis in the form of an analytical paper, the contents of which will be repeated in a separate chapter in the next edition of HBAI.
The information presented in this paper is based on analysis of eleven waves of the British Household Panel Survey (BHPS), from 1991 up to and including 2001. This publication concentrates on low-income dynamics, particularly in regard to the characteristics and trends of those individuals who are persistently observed as living in low-income households.