An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women

Simon Burgess () and Carol Propper

No 1830, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The rise in inequality and poverty is one of the most important economic and social issues in recent times. But in contrast to the literature on individual earnings inequality, there has been little work modelling (as opposed to documenting) household income dynamics. This is largely because of the difficulties created by the fact that on top of the human capital issues that arise in personal earnings, individuals are continually forming, dissolving and reforming household units. This paper proposes a framework for modelling household income dynamics. It emphasizes the role of household formation and dissolution and labour market participation. It allows standard economic theory to address the issues of household, as distinct from individual, income and poverty dynamics. In this paper, we illustrate this framework with an application to poverty rates among young women in the United States. We use this model to analyse differences in poverty experiences, particularly between black and white women.

Keywords: household income dynamics; poverty analysis (search for similar items in EconPapers)
JEL-codes: D31 I32 (search for similar items in EconPapers)
Date: 1998-03
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Citations: View citations in EconPapers (29)

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Working Paper: An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women (1998)
Working Paper: An economic model of household income dynamics, with an application to poverty dynamics among American women (1998)
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