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On the Evaluation of Economic Mobility

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Author Info
Peter Gottschalk () (Boston College)
Enrico Spolaore (Brown University)

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Abstract

This paper presents a framework for the evaluation and measurement of reversal and origin independence as separate aspects of economic mobility. We show how that evaluation depends on aversion to multi-period inequality, aversion to inter-temporal fluctuations, and aversion to second-period risk. We construct extended Atkinson indices that allow us to quantify the relative impact of reversal and time independence. We apply our approach to the comparison of income mobility in Germany and in the United States. We find that the ranking of Germany and the US on the extent of reversal depends on the degree of aversion to inequality. Reversal has a higher impact in the US than in Germany for lower degrees of aversion to multi-period inequality, while reversal has higher impact in Germany for higher degrees of inequality aversion. By contrast, Americans gain more than Germans from origin independence for a large range of degrees of inequality aversion.

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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 459.

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Length: 40 pages
Date of creation: 01 May 2000
Date of revision: 09 Apr 2001
Publication status: published, Review of Economic Studies, 69, 191-208, 2002.
Handle: RePEc:boc:bocoec:459

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Related research
Keywords: mobility; reversal; origin independence; welfare.;

Other versions of this item:

Find related papers by JEL classification:
D60 - Microeconomics - - Welfare Economics - - - General
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
J69 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Other

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. C. Schluter & D. Van De Gaer, 2008. "Structural Mobility, Exchange Mobility and Subgroup Consistent Mobility Measurement – US–German Mobility Measurements Revisited," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/543, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
  2. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," Levine's Bibliography 122247000000000283, UCLA Department of Economics. [Downloadable!]
    Other versions:
  3. Robert Aebi & Klaus Neusser & Peter Steiner, 2006. "A Large Deviation Approach to the Measurement of Mobility," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(II), pages 195-222, June. [Downloadable!]
    Other versions:
  4. James W. Boudreau, 2008. "Stratification and Growth in Agent-based Matching Markets," Working papers 2008-30, University of Connecticut, Department of Economics. [Downloadable!]
  5. Rolf Aaberge & Magne Mogstad, 2009. "On the Measurement of Long-Term Income Inequality and Income Mobility," ICER Working Papers 09-2009, ICER - International Centre for Economic Research. [Downloadable!]
  6. Alberto Alesina & Eliana La Ferrara, 2001. "Preferences for Redistribution in the Land of Opportunities," Harvard Institute of Economic Research Working Papers 1936, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
  7. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't The US Have a European-Style Welfare State?," Harvard Institute of Economic Research Working Papers 1933, Harvard - Institute of Economic Research. [Downloadable!]
  8. Alesina, Alberto F & La Ferrara, Eliana, 2002. "Preferences for Redistribution in the Land of Opportunities," CEPR Discussion Papers 3155, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Antman, Francisca & McKenzie, David J., 2005. "Earnings mobility and measurement error : a pseudo-panel approach," Policy Research Working Paper Series 3745, The World Bank. [Downloadable!]
    Other versions:
  10. Tullio Jappelli & Luigi Pistaferri, 1999. "Intertemporal Choice and Consumption Mobility," CSEF Working Papers 23, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
    Other versions:
  11. Denisa Maria Sologon & Cathal O'Donoghue, 2009. "Increased Opportunity to Move up the Economic Ladder?: Earnings Mobility in EU: 1994-2001," SOEPpapers 221, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
  12. Riener, Gerhard, 2006. "Inequality and Mobility of Household Incomes in Europe. Evidence from the ECHP," Economics Series 195, Institute for Advanced Studies. [Downloadable!]
  13. Paul Allanson, 2008. "On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective," Discussion Papers 219, University of Dundee, Economic Studies. [Downloadable!]
  14. Irina Denisova, 2007. "Entry to and Exit from Poverty in Russia: Evidence from Longitudinal Data," Working Papers w0098, Center for Economic and Financial Research (CEFIR). [Downloadable!]
  15. Maia Güell & José V. Rodríguez Mora & Chris Telmer, 2007. "Intergenerational Mobility and the Informative Content of Surnames," CEP Discussion Papers dp0810, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  16. Valentino Dardanoni & Marcello D’Agostino, 2007. "The Measurement of Rank Mobility," Working Papers 80, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
  17. Sologon, Denisa Maria & O'Donoghue, Cathal, 2009. "Increased Opportunity to Move Up the Economic Ladder? Earnings Mobility in EU: 1994-2001," IZA Discussion Papers 4311, Institute for the Study of Labor (IZA). [Downloadable!]
  18. Audra J. Bowlus & Jean-Marc Robin, 2002. "Twenty years of rising inequality in US lifetime labor values," Research Unit Working Papers 0105, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
  19. R. Bénabou & E. Ok, . "Mobility as Progressivity: Ranking Income Processes According to Equality of Opportunity," Princeton Economic Theory Papers 00f1, Economics Department, Princeton University.
    Other versions:
  20. Alberto Alesina & George-Marios Angeletos, 2003. "Fairness and Redistribution: U.S. versus Europe," NBER Working Papers 9502, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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