Vulnerable households and variable incomes

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 usingWaves 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.