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Consolidating the Evidence on Income Mobility in the Western States of Germany and the U.S. from 1984-2006

  • Gulgun Bayaz Ozturk
  • Richard V. Burkhauser
  • Kenneth A. Couch

The cross-national intragenerational income mobility literature assumes within-country mobility is invariant over the period measured. We argue that a great social transformation "German reunification"abruptly and permanently altered economic mobility. Using standard measures of mobility (with panel data for the western states of Germany and the U.S.) over the entire period 1984-2006, we find the conventional result that income mobility is greater in Germany. But when we cut the data into moving five-year windows and compare mobility before and after reunification, income mobility declines significantly over the years immediately following reunification in Germany but not in the U.S.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.417498.de/diw_sp0544.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 544.

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Length: 28 p.
Date of creation: 2013
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp544
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  1. Philippe Van Kerm, 2004. "What Lies Behind Income Mobility? Reranking and Distributional Change in Belgium, Western Germany and the USA," Economica, London School of Economics and Political Science, vol. 71(281), pages 223-239, 05.
  2. Jenkins, Stephen P. & Van Kerm, Philippe, 2003. "Trends in income inequality, pro-poor income growth and income mobility," ISER Working Paper Series 2003-27, Institute for Social and Economic Research.
  3. Charlotte Bartels & Timm Bönke, 2010. "German Male Income Volatility 1984 to 2008: Trends in Permanent and Transitory Income Components and the Role of the Welfare State," SOEPpapers on Multidisciplinary Panel Data Research 325, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Stephen P. Jenkins & Philippe Van Kerm, 2006. "Trends in income inequality, pro-poor income growth, and income mobility," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 531-548, July.
  5. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
  6. Martin Biewen, 2002. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," Discussion Papers of DIW Berlin 292, DIW Berlin, German Institute for Economic Research.
  7. Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How Unification and Immigration Affected the German Income Distribution," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 867-878.
  8. Ayala, L. & Sastre, M., 2002. "Europe vs. The United States: Is There a Trade-Off Between Mobility and Inequality?," European Economy Group Working Papers 19, European Economy Group.
  9. Esfandiar Maasoumi & Mark Trede, 2001. "Comparing Income Mobility In Germany And The United States Using Generalized Entropy Mobility Measures," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 551-559, August.
  10. Biewen, Martin, 2002. "Bootstrap inference for inequality, mobility and poverty measurement," Journal of Econometrics, Elsevier, vol. 108(2), pages 317-342, June.
  11. Frick, Joachim R. & Jenkings, Stephen P. & Lillard, Dean R. & Lipps, Oliver & Wooden, Mark, 2007. "The Cross-National Equivalent File (CNEF) and Its Member Country Household Panel Studies," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 627-654.
  12. Wen-Hao Chen, 2009. "Cross-National Differences In Income Mobility: Evidence From Canada, The United States, Great Britain And Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(1), pages 75-100, 03.
  13. Sastre, Mercedes & Ayala, Luis, 2002. "Europe vs. the United States: is there a trade-off between mobility and inequality?," ISER Working Paper Series 2002-26, Institute for Social and Economic Research.
  14. Peter Gottschalk & Robert Moffitt, 2009. "The Rising Instability of U.S. Earnings," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 3-24, Fall.
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