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Income inequality and income mobility

01 Jan 2007-pp 2275-2277
About: The article was published on 2007-01-01 and is currently open access. It has received 119 citations till now. The article focuses on the topics: Income distribution & Income inequality metrics.
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TL;DR: Van Kerm et al. as mentioned in this paper compared the income mobility profiles of individuals in the UK and Greece using the ISER Working Paper 2006-36, comparing the two countries' income mobility profile.
Abstract: Acknowledgement: Comments by Bruno Jeandidier, Stephen Jenkins, Stephane Mussard, participants at the EPUNet-2005 conference, and seminar participants at the Athens University of Economics and Business and the Universite Nancy 2 are gratefully acknowledged. Readers wishing to cite this document are asked to use the following form of words: Van Kerm, Philippe (July 2006) ‘Comparisons of income mobility profiles’, ISER Working Paper 2006-36. Colchester: University of Essex. The on-line version of this working paper can be found at http://www.iser.essex.ac.uk/pubs/workpaps/

42 citations


Cites background from "Income inequality and income mobili..."

  • ...No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form, or by any means, mechanical, photocopying, recording or otherwise, without the prior permission of the Communications Manager, Institute for Social and Economic Research....

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  • ...The most prominent measures that do not belong to this class are indices that capture mobility by comparing inequality in the short and in the long run (Shorrocks, 1978, Chakravarty et al., 1985, Maasoumi & Zandvakili, 1986, Fields, 2005)....

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Posted Content
TL;DR: This article examined intergenerational occupational mobility in India, and found substantial inter-generational persistence, particularly in the case of low-skilled and low-paying occupations, e.g., almost half the children of agricultural labourers end up becoming agricultural laborers.
Abstract: Using data from the India Human Development Survey (IHDS) 2005, we examine intergenerational occupational mobility in India, an issue on which very few systematic and rigorous studies exist. We group individuals into classes and document patterns of mobility at the rural, urban and all-India levels, and for different caste groups. We find substantial intergenerational persistence, particularly in the case of low-skilled and low-paying occupations, e.g. almost half the children of agricultural labourers end up becoming agricultural labourers. We also document differences across caste groups. Overall, our results suggest considerable inequality of opportunity in India.

40 citations

Journal ArticleDOI
TL;DR: In this article, the authors examined the effect of taxes and transfers on the distribution of income insecurity in a cross-national equivalence file (CNEF) and found that income insecurity based on pre-government incomes is highest in Britain and lowest in Germany, however results for post-government income are highest in the U.S.
Abstract: This paper studies income volatility using recent data from the Cross National Equivalence File (CNEF). Measures of downward instability are applied to household income streams and the results are interpreted as indicators of income insecurity. Using this method we examine (i) cross national differences in average insecurity levels, (ii) the effects of taxes and transfers, and (iii) relationships between the insecurity index and household income. Insecurity estimates based on pre-government incomes are highest in Britain and lowest in Germany, however results for post-government incomes are highest in the U.S. It is also shown that insecurity estimates based upon pre-government incomes are heavily concentrated at the lower end of the distribution; although governments are effective at smoothing the income streams of these households. We also search for determinants of our measure and find that gender, household size, health status, and industry affiliations of the household head are the most significant covariates.

36 citations


Cites background from "Income inequality and income mobili..."

  • ...Unlike typical mobility indices such as the Shorrocks R coefficient (Shorrocks, 1978),(2) a measure of insecurity should ideally be focused mostly on the threat of downward drops rather than non-directional or inequality reducing movements....

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  • ...…differences between the concepts to warrant altogether independent approaches.1 Unlike typical mobility indices such as the Shorrocks R coefficient (Shorrocks, 1978),2 a measure of insecurity should ideally be focused mostly on the threat of downward drops rather than non-directional or inequality…...

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Journal ArticleDOI
TL;DR: A unique data set with nearly career-long income histories is exploited to assess the role of so-called life-cycle bias in empirical analysis of income inequality that uses current income variables as proxies for lifetime income and finds evidence of substantial life- cycle bias in estimates of inequality based on current income.
Abstract: To gauge inequality in living standards, the distribution of lifetime income is likely to be more relevant than the distribution of current income. Yet, empirical studies of income inequality are typically based on observations of income for one or a few years. In this paper, we exploit a unique data set with nearly career-long income histories to assess the role of so-called life-cycle bias in empirical analysis of income inequality that uses current income variables as proxies for lifetime income. We find evidence of substantial life-cycle bias in estimates of inequality based on current income. One implication is that cross-sectional estimates of income inequality are likely to be sensitive to the age composition of the sample. A decomposition of the life-cycle bias into income mobility and heterogeneous profiles reveal the importance of two explanations that have been put forth to explain the disagreement between current and lifetime inequality.

35 citations

Journal ArticleDOI
TL;DR: In this paper, the authors examined the measurement of social welfare, poverty, and inequality, taking into account features that have been found to be important welfare determinants in behavioral economics, such as reference-dependence, loss aversion, and diminishing sensitivity.
Abstract: This paper examines the measurement of social welfare, poverty, and inequality, taking into account features that have been found to be important welfare determinants in behavioral economics. Most notably, we incorporate reference-dependence, loss aversion, and diminishing sensitivity—aspects emphasized in Prospect Theory—to social welfare measurement. We suggest a new notion of equivalent income, the income level with which the individual would be as well off, evaluated using a standard concave utility function, as he actually is, evaluated with a reference-dependent utility function. We examine the differences between standard poverty and inequality measures based on observed income and measures that are calculated based on equivalent income. These differences are illustrated using household-level panel data from Russia and Vietnam.

33 citations


Cites background from "Income inequality and income mobili..."

  • ...…offer an axiomatic treatment of chronic poverty measures and Foster (2009) extends the FGT class of poverty measures to an intertemporal setting.5 The literature on income mobility—see Shorrocks (1978) for an influential early reference—is also related to our work as it uses longitudinal data....

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References
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Journal ArticleDOI
TL;DR: This article used Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States and found that long-term mobility among all workers has increased since the 1950s but has slightly declined among men.
Abstract: This paper uses Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States. Annual earnings inequality is U-shaped, decreasing sharply up to 1953 and increasing steadily afterward. Short-term earnings mobility measures are stable over the full period except for a temporary surge during World War II. Virtually all of the increase in the variance in annual (log) earnings since 1970 is due to increase in the variance of permanent earnings (as opposed to transitory earnings). Mobility at the top of the earnings distribution is stable and has not mitigated the dramatic increase in annual earnings concentration since the 1970s. Long-term mobility among all workers has increased since the 1950s but has slightly declined among men. The decrease in the gender earnings gap and the resulting substantial increase in upward mobility over a lifetime for women are the driving force behind the increase in long-term mobility among all workers.

546 citations

Journal ArticleDOI
TL;DR: In this paper, the authors estimate trends in intergenerational economic mobility by matching men in the Census to synthetic parents in the prior generation, finding that mobility increased from 1950 to 1980 but has declined sharply since 1980.
Abstract: We estimate trends in intergenerational economic mobility by matching men in the Census to synthetic parents in the prior generation. We find that mobility increased from 1950 to 1980 but has declined sharply since 1980. While our estimator places greater weight on location effects than the standard intergenerational coefficient, the size of the bias appears to be small. Our preferred results suggest that earnings are regressing to the mean more slowly now than at any time since World War II, causing economic differences between families to become more persistent. However, current rates of positional mobility appear historically normal.

239 citations

Journal ArticleDOI
TL;DR: Gender- and age-related changes in sexual orientation identity from early adolescence through emerging adulthood in 13,840 youth ages 12–25 employing mobility measure M, a measure modified from its original application for econometrics is described.
Abstract: This study investigated stability and change in self-reported sexual orientation identity over time in youth. We describe gender- and age-related changes in sexual orientation identity from early adolescence through emerging adulthood in 13,840 youth ages 12–25 employing mobility measure M, a measure we modified from its original application for econometrics. Using prospective data from a large, ongoing cohort of U.S. adolescents, we examined mobility in sexual orientation identity in youth with up to four waves of data. Ten percent of males and 20% of females at some point described themselves as a sexual minority, while 2% of both males and females reported ever being “unsure” of their orientation. Two novel findings emerged regarding gender and mobility: (1) Although mobility scores were quite low for the full cohort, females reported significantly higher mobility than did males. (2) As expected, for sexual minorities, mobility scores were appreciably higher than for the full cohort; however, the gender difference appeared to be eliminated, indicating that changing reported sexual orientation identity throughout adolescence occurred at a similar rate in female and male sexual minorities. In addition, we found that, of those who described themselves as “unsure” of their orientation identity at any point, 66% identified as completely heterosexual at other reports and never went on to describe themselves as a sexual minority. Age was positively associated with endorsing a sexual-minority orientation identity. We discuss substantive and methodological implications of our findings for understanding development of sexual orientation identity in young people.

193 citations

01 Jan 2013
TL;DR: In this article, the authors survey the literature on income mobility, aiming to provide an integrated discussion of mobility within and between-generations, and review mobility concepts, descriptive devices, measurement methods, data sources, and recent empirical evidence.
Abstract: We survey the literature on income mobility, aiming to provide an integrated discussion of mobility within- and between-generations. We review mobility concepts, descriptive devices, measurement methods, data sources, and recent empirical evidence.

156 citations

Journal ArticleDOI
TL;DR: This article developed a new class of measures of mobility as an equalizer of longer-term incomes, a concept different from other notions such as mobility as time-independence, positional movement, share movement, income flux, and directional income movement.
Abstract: This paper develops a new class of measures of mobility as an equalizer of longer-term incomes—a concept different from other notions such as mobility as time-independence, positional movement, share movement, income flux, and directional income movement. A number of properties are specified leading to a class of indices, one easily-implementable member of which is applied to data for the USA and France. Using this index, income mobility is found to have equalized longer-term earnings among US men in the 1970s but not in the 1980s or 1990s. In France, though, income mobility was equalizing throughout, and it has attained its maximum in the most recent period.

150 citations