Why Rising Tides Dont Lift All Boats? An Explanation of the Relationship between Poverty and Unemployment in Britain
49 Pages Posted: 14 Jul 2008
Date Written: February 2001
Abstract: This paper is motivated by the lack of any obvious relationship between aggregate poverty and unemployment in Great Britain. We derive a framework based on individuals' risks of unemployment and poverty, and how these vary over the economic cycle. Analysing the British Household Panel Survey for 1991-96, we are able to square the micro evidence - that unemployment matters for poverty - with the macro picture - that there's no strong link. We then go on to identify which household and individual characteristics are associated with whether an individual's poverty risk is vulnerable to the economic cycle.
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