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Intra-generational mobility and repeated cross-sections : a three-country validation exercise

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Author Info

  • Cruces, Guillermo
  • Lanjouw, Peter
  • Lucchetti, Leonardo
  • Perova, Elizaveta
  • Vakis, Renos
  • Viollaz, Mariana

Abstract

This paper validates a recently proposed method to estimate intra-generational mobility through repeated cross-sectional surveys. The technique allows the creation of a"synthetic panel"-- done by predicting future or past household income using a set of simple modeling and error structure assumptions -- and thus permits the estimation of lower and upper bounds on directional mobility measures. The authors validate the approach in three different settings where good panel data also exist (Chile, Nicaragua, and Peru). In doing so, they also carry out a number of refinements to the validation procedure. The results are broadly encouraging: the methodology performs well in all three settings, especially in cases where richer model specifications can be estimated. The technique does equally well in predicting short and long-term mobility patterns and is robust to a broad set of additional"stress"and sensitivity tests. Overall, the paper lends support to the application of this approach to settings where panel data are absent.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5916.

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Date of creation: 01 Dec 2011
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Handle: RePEc:wbk:wbrwps:5916

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Keywords: Services&Transfers to Poor; Poverty Reduction Strategies; Scientific Research&Science Parks; Science Education; Housing&Human Habitats;

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  1. Antman, Francisca & McKenzie, David J., 2005. "Earnings mobility and measurement error : a pseudo-panel approach," Policy Research Working Paper Series 3745, The World Bank.
  2. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, Elsevier, vol. 78(1), pages 93-99, January.
  3. Dang, Hai-Anh & Lanjouw, Peter & Luoto, Jill & McKenzie, David, 2014. "Using repeated cross-sections to explore movements into and out of poverty," Journal of Development Economics, Elsevier, Elsevier, vol. 107(C), pages 112-128.
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Cited by:
  1. Krebs, Tom & Krishna, Pravin & Maloney, William F., 2012. "Income Risk, Income Mobility and Welfare," IZA Discussion Papers 7056, Institute for the Study of Labor (IZA).
  2. Tom Krebs & Pravin Krishna & William Maloney, 2013. "Income Mobility and Welfare," IMF Working Papers, International Monetary Fund 13/24, International Monetary Fund.

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