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What Lies Behind Income Mobility? Reranking and Distributional Change in Belgium, Western Germany and the USA

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  • Philippe Van Kerm

Abstract

The paper presents a decomposition of income mobility indices into two basic sources: mobility induced by a change of the income distribution shape, and mobility induced by a reordering of individuals in the income pecking order. The decomposition procedure, based on counterfactual distributions, results in a decomposition that is applicable to a broad class of mobility measures. Application to income 'movement' indices with data for Belgium, Western Germany and the USA indicates that reranking has been the major force behind income mobility. Copyright (c) The London School of Economics and Political Science 2004.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 71 (2004)
Issue (Month): 281 (05)
Pages: 223-239

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Handle: RePEc:bla:econom:v:71:y:2004:i:281:p:223-239

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  1. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
  2. Markandya, A, 1982. "The Measurement of Earnings Mobility among Occupational Groups," Scottish Journal of Political Economy, Scottish Economic Society, vol. 29(1), pages 75-88, February.
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  5. Christian Schluter & Mark Trede, 2003. "Local versus Global Assessment of Mobility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1313-1335, November.
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  7. Javier Ruiz-Castillo, 2004. "The measurement of structural and exchange income mobility," Journal of Economic Inequality, Springer, vol. 2(3), pages 219-228, September.
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  9. Esfandiar Maasoumi & Mark Trede, 2001. "Comparing Income Mobility In Germany And The United States Using Generalized Entropy Mobility Measures," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 551-559, August.
  10. Richard V. Burkhauser & John G. Poupore, 1997. "A Cross-National Comparison Of Permanent Inequality In The United States And Germany," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 10-17, February.
  11. King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
  12. Fields, Gary S & Ok, Efe A, 1999. "Measuring Movement of Incomes," Economica, London School of Economics and Political Science, vol. 66(264), pages 455-71, November.
  13. Frank Cowell & Christian Schluter, 1998. "Measuring income mobility with dirty data," LSE Research Online Documents on Economics 2079, London School of Economics and Political Science, LSE Library.
  14. Cowell, Frank A, 1985. "Measures of Distributional Change: An Axiomatic Approach," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 135-51, January.
  15. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December.
  16. Mervyn A. King, 1980. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," NBER Working Papers 0468, National Bureau of Economic Research, Inc.
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