Income Dynamics: 2010 to 2021
Results from an analysis of the longitudinal survey ‘Understanding Society’, looking at persistent low income and changes in household income.
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Add the following citation to any analysis shared or published:
Department for Work & Pensions (DWP), released 23 March 2023, GOV.UK website, statistical release, Income Dynamics: 2010 to 2021.
Income Dynamics provides estimates of the rates of persistent low income. An individual is classed as being in persistent low income if they are in low income in at least 3 out of 4 years.
Income Dynamics also provides estimates of mobility across the income distribution, including low income entry and exit rates, as well as analysis on the events associated with low income entry and exit.
Income Dynamics estimates are based on Understanding Society, a longitudinal survey which follows respondents over time. This is unlike the Households Below Average Income (HBAI) series, which uses the Family Resources Survey (FRS) to look at the distribution of incomes within a different sample each year.
Changes for the 2010 to 2021 publication
Inclusion of the Understanding Society Immigrant and Ethnic Minority Boost Sample
We have included, for the first time in Income Dynamics, individuals who joined the Understanding Society as part of their Immigrant and Ethnic Minority Boost (IEMB) sample. The sample was introduced in order to offer a more complete picture of ethnic minority groups in the UK and to improve the representativeness of the survey. Its inclusion will improve the quality of Income Dynamics statistics.
Linked to this development, we have revised some of our income mobility analysis to take 2015 and 2016 as its starting point rather than 2010 and 2011, so that individuals from the IEMB sample can be included.
Events associated with entries and exits into low income
We have introduced 2 new events to our analysis of events associated with low income entry and exit:
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The first new event explores movements between full-time and part-time work within a household and how these relate to low income entry and exit.
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The second new event considers how a household-level change from worklessness to working is linked to exiting from low income, and how a change from working to worklessness is linked to low income entry.