Consequently policies aiming to reduce chronic poverty using means-tested benefits will be compromised if benefits are targeted using information about current incomes, as we demonstrate with a numerical illustration. In this paper we supplement the standard picture with longitudinal perspectives, in particular examining the extent to which child poverty in Britain is chronic or transitory in nature. A person's income is measured using the net household income of the household to which he or she belongs, adjusted using for differences in household size and composition using an equivalence scale. In addition, and the principal focus of our research, we provide information about the extent of chronic and transitory poverty. To decompose total poverty into its chronic and transitory components, we define someone to be chronically poor if his or her smoothed income is less than the poverty line.
Transitory poverty is then the part of total poverty that remains once chronic poverty is removed.
It is the component of total poverty which is attributable to inter-temporal variations in income. Whichever longitudinal poverty concept we use, we find that children, especially very young children, have high poverty risks compared to other groups in the population. For example, although only 1.4 percent of children were poor at every one of the six annual BHPS interviews 1991-6, some 14 percent were poor at least three times. By contrast 9.7 percent of adults were poor at least three times. We find that total and chronic poverty are of sizeable magnitude among British children, especially very young children.