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    Poverty Amongst British Children: chronic or transitory?

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    We investigate the nature of child poverty in Britain, adding a longitudinal perspective to cross-sectional pictures such as provided by previous research. Using panel data from the British Household Panel Survey, we analyse poverty over a six year interval (1991-6). We provide information about how many times over this period each child or adult in our sample was poor. In addition, and the principal focus of our research, we provide information about the extent of chronic and transitory poverty. For this analysis, we use information about current incomes and smoothed income (the six-year average of each individual's current income) relative to the poverty line. Whichever longitudinal poverty concept we use, we find that children, especially very young children, have high poverty risks compared to other groups in the population. Since people's incomes typically vary from one year to the next, the observed (current income) poverty status for many people may not match with their chronic poverty status. Consequently policies aiming to reduce chronic poverty using means-tested benefits will be compromised if benefits are targeted using information about current incomes, as we demonstrate with a numerical illustration

    Summarizing multiple deprivation indicators

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    Deprivation scales derived from multiple, typically dichotomous, indicators, are widely used to monitor households standards of living, and to complement measures of living standards based on income. We use an item response modelling (IRM) framework to address several issues concerning the derivation of deprivation scales in general and the use of sum-score deprivation indices in particular. Although we favour the IRM approach over the sum-score one in principle, we find in an illustrative analysis of basic lifestyle deprivation in Britain in the mid-1990s that both approaches provide very similar pictures of households circumstances. We conclude with further discussion of the relative merits of the two approaches and highlight some topics for future research

    Modelling low income transitions

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    We examine the determinants of low income transitions using first-order Markov models that control for initial conditions effects (those found to be poor in the base year may be a non-random sample) and for attrition (panel retention may also be non-random). The model estimates, derived from British panel data for the 1990s, indicate that there is substantial state dependence in poverty, separate from persistence induced by heterogeneity. We also provide estimates of low income transition rates and lengths of poverty and non-poverty spells for persons of different types
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