The distribution and dynamics of economic and social wellbeing in the UK: An analysis of the recession using multidimensional indicators of living standards (MILS)

Living standards in the United Kingdom are typically measured using income or expenditure as a proxy. Past research into living standards focuses on how living standards have changed over time, the extent to which there are in inequalities in living standards for different groups, and the impact of the recession on living standards. To date, little research has combined economic and non-economic indicators to inform living standards research.

Multidimensional indicators of living standards can be measured in eleven key dimensions of individual and family welfare, which fall under three overarching domains: What we have, What we do, and Where we live.

This research provides greater understanding of the relationship between objective and subjective indicators of living standards and how this changed over the course of the recession for families at different stages in life. The research used data from three UK national surveys:
- Poverty and Social Exclusion Survey (PSE) 2012
- Family Resources Survey (FRS) 2006/07 - 2015/16
- UK Household Longitudinal Study “Understanding Society” (USoc) 2009-11 - 2014-16.

The research confirms that certain family life-course types, e.g. single adults of working age and single parents, had been affected most by the economic downturn and subsequent recovery. The same family life-course type differences and trends across the recessionary period are found in both objective and subjective indicators of resources (e.g. income, financial situation and mental health). The analysis showed the importance of the nature of the measures and indicators used, when trying to establish changes in trends in both objective and subjective indicators and the relationship between them over time. The associations between objective and subjective indicators of economic resources are most closely aligned when individual measures or indicators of living standards share many similarities in how they are defined, operationalised and measured in surveys. The findings confirm the importance of income as a key resource in living standards and the scientific validity of material deprivation items used in the three surveys in question (PSE, FRS and USoc). Satisfaction with income, satisfaction with financial situation, and satisfaction with life can be used as valid and reliable subjective indicators of living standards and how they change over time.