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Mobility as Progressivity: Ranking Income Processes According to Equality of Opportunity

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  • R. Bénabou
  • E. Ok

Abstract

Interest in economic mobility stems largely from its perceived role as an equalizer of opportunities, though not necessarily of outcomes. In this paper we show that this view leads very naturally to a methodology for the measurement of social mobility which has strong parallels with the theory of progressive taxation. We characterize opportunity--equalizing mobility processes, and provide simple criteria to determine when one process is more equalizing than another. We then explain how this mobility ordering relates to social welfare analysis, and how it differs from existing ones. We also extend standard indices of tax progressivity to mobility processes, and illustrate our general methodology on intra- and intergenerational mobility data from the United States and Italy.

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Paper provided by Economics Department, Princeton University in its series Princeton Economic Theory Papers with number 00f1.

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Handle: RePEc:wop:prinet:00f1

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  1. Peter Gottschalk & Enrico Spolare, 2001. "On the Evaluation of Economic Mobility," Working Papers 2001-25, Brown University, Department of Economics.
  2. Conlisk, John, 1989. "Ranking mobility matrices," Economics Letters, Elsevier, vol. 29(3), pages 231-235.
  3. Ravi Kanbur, S. M. & Stromberg, Jan-Olov, 1988. "Income transitions and income distribution dominance," Journal of Economic Theory, Elsevier, vol. 45(2), pages 408-416, August.
  4. Checchi, Daniele & Ichino, Andrea & Rustichini, Aldo, 1999. "More equal but less mobile?: Education financing and intergenerational mobility in Italy and in the US," Journal of Public Economics, Elsevier, vol. 74(3), pages 351-393, December.
  5. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
  6. Hungerford, Thomas L, 1993. "U.S. Income Mobility in the Seventies and Eighties," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 403-17, December.
  7. Dardanoni Valentino, 1993. "Measuring Social Mobility," Journal of Economic Theory, Elsevier, vol. 61(2), pages 372-394, December.
  8. Peter Gottschalk & Sheldon Danziger, 1997. "Family Income Mobility -- How Much Is There and Has It Changed?," Boston College Working Papers in Economics 398, Boston College Department of Economics.
  9. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  10. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring.
  11. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
  12. Shorrocks, A F, 1978. "The Measurement of Mobility," Econometrica, Econometric Society, vol. 46(5), pages 1013-24, September.
  13. Le Breton, Michel & Moyes, Patrick & Trannoy, Alain, 1996. "Inequality Reducing Properties of Composite Taxation," Journal of Economic Theory, Elsevier, vol. 69(1), pages 71-103, April.
  14. 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.
  15. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
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