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Modelling Vulnerability in the UK

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  • Sanghamitra Bandyopadhyay
  • Frank Cowell

Abstract

In this paper we examine the concept of vulnerability (Townsend 1994) 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 Survey 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. Quantile-specific estimates reveal specific quantiles, particularly those around the poverty line which are most susceptible to be vulnerable to shocks to the income stream. The estimates are found to be robust to household composition and year-specific shocks.

Suggested Citation

  • Sanghamitra Bandyopadhyay & Frank Cowell, 2007. "Modelling Vulnerability in the UK," Economics Series Working Papers 313, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:313
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    References listed on IDEAS

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    1. Amin, Sajeda & Rai, Ashok S. & Topa, Giorgio, 2003. "Does microcredit reach the poor and vulnerable? Evidence from northern Bangladesh," Journal of Development Economics, Elsevier, vol. 70(1), pages 59-82, February.
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    Cited by:

    1. Rohde, Nicholas & Tang, K.K. & Osberg, Lars & Rao, Prasada, 2016. "The effect of economic insecurity on mental health: Recent evidence from Australian panel data," Social Science & Medicine, Elsevier, vol. 151(C), pages 250-258.
    2. Sanghamitra Bandyopadhyay, 2016. "The Vulnerable Are Not (Necessarily) the Poor," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 29-57, Emerald Group Publishing Limited.
    3. Celidoni, Martina, 2011. "Vulnerability to poverty: An empirical comparison of alternative measures," MPRA Paper 33002, University Library of Munich, Germany.
    4. Nicholas Rohde & Kam Ki Tang & Prasada Rao, 2011. "Income volatility and insecurity in the U.S., Germany and Britain," Discussion Papers Series 434, School of Economics, University of Queensland, Australia.

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    More about this item

    Keywords

    Income Variability; Vulnerability; Income Dynamics; BHPS;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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