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On the Non-Stationarity of German Income Mobility (and some observations on poverty dynamics)

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  • Christian Schluter

Abstract

The intra-distributional mobility of German income dynamics is analysed using GSOEP. Transition probabilities are found to be time-varying. The tested models comprise various mixed Markov chains in discrete time and a non-stationary mover-stayer model is proposed. In order to explain the observed mobility profiles, we concentrate on one important income class - the poor - instead of the entire transition matrix. Various poverty duration models accommodating unobserved population heterogeneity and duration dependence are examined.

Suggested Citation

  • Christian Schluter, 1997. "On the Non-Stationarity of German Income Mobility (and some observations on poverty dynamics)," STICERD - Distributional Analysis Research Programme Papers 30, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stidar:30
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    File URL: http://sticerd.lse.ac.uk/dps/darp/darp30.pdf
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    References listed on IDEAS

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    1. Schmidt, Peter & Witte, Ann Dryden, 1989. "Predicting criminal recidivism using 'split population' survival time models," Journal of Econometrics, Elsevier, vol. 40(1), pages 141-159, January.
    2. Christian Schluter, 1996. "Income Distribution and Inequality in Germany: Evidence from Panel Data," STICERD - Distributional Analysis Research Programme Papers 16, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    3. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-138, February.
    4. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 63-132.
    5. Burkhauser, Richard V & Smeeding, Timothy M & Merz, Joachim, 1996. "Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 381-400, December.
    6. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
    7. Burton Singer & Seymour Spilerman, 1976. "Some Methodological Issues in the Analysis of Longitudinal Surveys," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 447-474 National Bureau of Economic Research, Inc.
    8. Trede, Mark M., 1994. "Statistical inference in mobility measurement: Sex differences in earnings mobility," Discussion Papers in Econometrics and Statistics 4/94, University of Cologne, Institute of Econometrics and Statistics.
    9. Christian Schluter, 1996. "Income Mobility in Germany: Evidence from Panel Data," STICERD - Distributional Analysis Research Programme Papers 17, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    10. Ruggles, Patricia & Williams, Roberton, 1989. "Longitudinal Measures of Poverty: Accounting for Income and Assets over Time," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 35(3), pages 225-243, September.
    11. Geweke, John & Marshall, Robert C & Zarkin, Gary A, 1986. "Mobility Indices in Continuous Time Markov Chains," Econometrica, Econometric Society, vol. 54(6), pages 1407-1423, November.
    12. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-956, July.
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    Cited by:

    1. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
    2. Canto, Olga, 2000. "Income Mobility in Spain: How Much Is There?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 85-102, March.

    More about this item

    Keywords

    Intra-distributional mobility; Markovian models; time-varying transition probabilities; poverty.;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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