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Abstract:

DARP Paper
Vulnerable Households and Variable Incomes (published in Research on Economic Inequality, vol. 13 (2006), pp. 3-30)
Sanghamitra Bandyopadhyay and Frank A Cowell February 2006
Paper No' DARP 079:
Full Paper (pdf)

In this paper we examine the concept of “vulnerability” within the context of income mobility of the poor. We test for the dynamics of vulnerable households in the UK using Waves 1 - 12 of the British Household Panel Study and find that, of three different types of risks that we test for, household-specific shocks and economy-wide aggregate shocks have the greatest impact on consumption, in comparison to shocks to the income stream.