Modelling Vulnerability in the UK.

Working paper

In this paper we examine the concept of "vulnerability" (Townsend 1994) within the context of income mobility of the poor. We test for the dynam- ics of vulnerable households in the UK using Waves 1 - 12 of the British Household Panel Survey and …nd that, of three di¤erent types of risks that we test for, household-speci…c shocks and economy-wide aggregate shocks have the greatest impact on consumption, in comparison to shocks to the income stream. Quantile-speci…c estimates reveal speci…c quantiles, particu- larly those around the poverty line which are most susceptible to be vulner- able to shocks to the income stream. The estimates are found to be robust to household composition and year-speci…c shocks.

Authors: Bandyopadhyay, S; Cowell, F

• Publisher: Department of Economics (University of Oxford)
• Series: Discussion paper series
• Publication date: 2007-01-01
• Language: English