Book Chapter•
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.
Citations
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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
Cites background or methods from "Income inequality and income mobili..."
...The annual samples are selected based on a fixed subset of digits of the transformation of the Social Security Number....
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...Shorrocks (1978) shows that (Theorem 1a, p. XX): G(z̄) ≤ K∑ t=1 G(zt)/K, where zt is the vector of earnings in period t and z̄ the vector of average (across periods) earnings....
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...Therefore, conceptually, a way to measure mobility (Shorrocks, 1978) is to compare inequality of short-term earnings to inequality of long-term earnings and define mobility as: (1) Long-term earnings inequality = Short-term earning inequality * (1 - Mobility) Alternatively, one can define mobility…...
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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
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
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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
Cites background or methods from "Income inequality and income mobili..."
...It has been found as an empirical regularity, from Shorrocks (1981) onwards, that using different indices can make a big difference to the estimates of R derived and also that the Gini coefficient tends to show greater R values than other inequality indices....
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...Evidence about sibling correlations in earnings (and income) was surveyed by Solon (1999), Björklund and Jäntti (2009), and also by Schnitzlein (2013), who provides new estimates for Denmark, Germany, and the USA....
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...The normalized trace is the Shorrocks (1978b) index calculated from the decile transition matrix....
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...The Equalization indices are those of Shorrocks (1978a) and Fields (2010)....
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...A more detailed examination of these two facets of mobility will provide a better understanding of the impact of income variability and the implications for social welfare (Shorrocks, 1978a, 392–393)....
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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
References
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TL;DR: In this article, the authors present a summary of the international literature published on the thematic area of the political economy analysis of income diversification related to the activities of rural households with emphasis on the importance of these activities in economic growth, poverty reduction and sustainable development over time.
Abstract: This paper presents a summary of the international literature published on the thematic area of the political economy analysis of income diversification related to the activities of rural households with emphasis on the importance of these activities in economic growth, poverty reduction and sustainable development over time. The review provides information about the overall effect of income diversification on economic welfare of rural householders. Typically, a positive relationship exists between income diversification activities and economic welfare indicators such as income, wealth, consumption and nutrition. However, recent empirical literature evidence shows that income diversification could also increase income inequality and contribute to marginalization of certain groups of people. For example, there is evidence to indicate that in some parts of the world that relatively few better-off rural householders with sufficient capital inputs achieve higher levels of income diversification from multiple sources of income portfolios partly due to increased support services from State and community sources. The benefits of income diversification have not been fully realized by many poor rural households largely due to capital constraints, weak links to the political power structures, and conflicts that adversely affect these households. Overall, income diversification can be an important poverty-reducing strategy if its use as a policy strategy is continuously examined and assessed in terms of its political economy dimensions with regards to productivity, equity and sustainability of rural livelihood activities with particular attention paid to vulnerable and marginalized groups.
12 citations
TL;DR: In this paper, the authors studied the pro-poor growth in the Latino American Andean countries, which are Ecuador, Colombia, Peru, Bolivia and Venezuela for the period between 2005 and 2010.
Abstract: This paper studies the pro-poor growth in the Latino American Andean countries. We first present different definitions of pro-poorness and the related methods in order to generate the statistically robust results for classes of pro-poor measures. Also, we present the non anonymous pro-poor approach and we propose also a new method to study the inter-temporal pro-poor growth with the aim to capture the change of wellbeing of the poor over time. We apply these procedures to five L.A. countries, which are Ecuador, Colombia, Peru, Bolivia and Venezuela for the period between 2005 and 2010. In general, we find strong statistical evidence that the Andean L.A. countries growths have been absolutely and relatively pro-poor for the period between 2005 and 2010. However, the 2008 world economic crisis has affected temporarily growth and the latter was not absolutely pro-poor during this economic crisis. Starting from 2009, the L.A. countries have registered a remarkable economic recovery. This recovery has helped to growth to absolutely pro-poor and thus, to continue to reduce poverty in this region of world.
12 citations
01 Jan 2005
TL;DR: In this paper, the impact of agricultural support policies on the distribution of farming incomes was investigated. But the authors found that the provision of support to Scottish agriculture was at best ineffective as a means to reduce the average size of income disparities between farms.
Abstract: This paper focuses on the impact of agricultural support policies on the distribution of farming incomes, using measures to characterise and quantify the redistributive effects that are based on the change in the absolute Gini index. The provision of support to Scottish agriculture is found to have been at best ineffective as a means to reduce the average size of income disparities between farms. Agricultural policy is further shown to have been inefficient as a redistributive tool because of the adverse distributional effect of the re-ranking of farms induced by the provision of support.
12 citations
Posted Content•
TL;DR: In this article, the authors examined changes in earnings inequality and mobility between 1978/9 and 2005/6 using a unique dataset that includes both those with secure patterns of employment and a wider group who experience periods without earnings.
Abstract: This paper examines changes in earnings inequality and mobility between 1978/9 and 2005/6 using a unique dataset that includes both those with secure patterns of employment and a wider group who experience periods without earnings. It finds significant increases in annual earnings inequality for both male and female employees. On most measures this is greater for men. When wider inequality is measured including periods of no earnings, inequality for men increases and for women it falls as employment among women increased. It finds little long range mobility. There is some evidence of greater short-range upward mobility but also greater movement from the lowest earning decile since 1997/98. More sophisticated measures of mobility suggest falling mobility for men through the 1980s and 1990s but some greater mobility since 2002. For women there has been lower mobility and less variation over time. Increases in employment for women have led to more equalising mobility.
12 citations
Posted Content•
TL;DR: In this article, the authors introduce a formal representation of income mobility as an equalizer of permanent income, which is called a mobility curve and forms the basis for comparison of income distributions according to income mobility.
Abstract: Do market-orientated economies with relatively large cross-sectional levels of inequality have higher income mobility and therefore less permanent inequality? To answer this question, we introduce a formal representation of income mobility as an equalizer of permanent income. The proposed representation is called a mobility curve and forms the basis for comparison of income distributions according to income mobility. The mobility curve captures the extent to which the distribution of permanent income is equalized because of changes in individuals' relative income over time. From the derivative of the mobility curve, we can assess the equalizing effect of income mobility in the lower, middle and upper part of the distribution of permanent income. The mobility curve allows us to develop dominance criteria that provide partial orderings of income distributions according to income mobility. We obtain complete orderings through an axiomatically justified family of rank-dependent measures of income mobility, which summarizes the informational content of the mobility curve. We illustrate the usefulness of these methods by re-examining previous findings of income mobility across countries. In contrast to the conclusions in previous studies, we find that changes in relative income over time contribute more (as much) to equality in permanent income in the US as in the Nordic countries and Germany.
12 citations