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Measuring Absolute Income Mobility: Lessons from North America and Europe

Author

Listed:
  • Robert Manduca
  • Maximilian Hell
  • Adrian Adermon
  • Jo Blanden
  • Espen Bratberg
  • Anne C. Gielen
  • Hans van Kippersluis
  • Keunbok Lee
  • Stephen Machin
  • Martin D. Munk
  • Martin Nybom
  • Yuri Ostrovsky
  • Sumaiya Rahman
  • Outi Sirniö

Abstract

We use linked parent-child administrative data for five countries in North America and Europe, as well as detailed survey data for two more, to investigate methodological challenges in the estimation of absolute income mobility. We show that the commonly used "copula and marginals" approximation methods perform well across countries in our sample, and the greatest challenges to their accuracy stem not from assumptions about relative mobility rates over time but from the use of nonrepresentative marginal income distributions. We also provide a multicountry analysis of sensitivity to specification decisions related to age of income measurement, income concept, family structure, and price index.

Suggested Citation

  • Robert Manduca & Maximilian Hell & Adrian Adermon & Jo Blanden & Espen Bratberg & Anne C. Gielen & Hans van Kippersluis & Keunbok Lee & Stephen Machin & Martin D. Munk & Martin Nybom & Yuri Ostrovsky , 2024. "Measuring Absolute Income Mobility: Lessons from North America and Europe," American Economic Journal: Applied Economics, American Economic Association, vol. 16(2), pages 1-30, April.
    • Handle: RePEc:aea:aejapp:v:16:y:2024:i:2:p:1-30
    DOI: 10.1257/app.20210137
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    Cited by:

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    2. Boustan, Leah & Jensen, Mathias Fjællegaard & Abramitzky, Ran & Jácome, Elisa & Manning, Alan & Pérez, Santiago & Watley, Analysia & Adermon, Adrian & Arellano-Bover, Jaime & Åslund, Olof & Connol, 2025. "Intergenerational mobility of immigrants in 15 destination countries," CEPR Discussion Papers 20003, Centre for Economic Policy Research.
    3. Patrick Bennett & Jessica Botros, 2024. "Intergenerational Mobility, Economic Shocks, and the Role of Human Capital," Working Papers 10, University of Liverpool, Department of Economics.
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    5. Wei Zou & Ruiqi Ma, 2024. "An Extended Family Perspective on Intergenerational Human Capital Transmission in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(3), pages 1101-1139, September.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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