Modelling household income dynamics

This paper is about income and poverty dynamics and their socioeconomic cor relates. The first half of the paper aims to establish some of the salient facts for Britain, applying the pioneering methods of Bane and Ellwood (198 6). Important for poverty dynamics are changes in labour earnings from pers ons other than the household head, changes in non-labour income (including benefits), and changes in household composition, in addition to changes in the heads' labour earnings. The second half of the paper is a review and cr itique of the multivariate modelling frameworks which might be used to expl ain and forecast these salient facts for Britain or elsewhere. JEL classifi cation: C23, C41, D31, I32.