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Measuring absolute income mobility: lessons from North America and Europe

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Listed:
  • Manduca, Robert
  • Hell, Maximilian
  • Adermon, Adrian
  • Blanden, Jo
  • Bratberg, Espen
  • C. Gielen, Anne
  • Van Kippersluis, Hans
  • Bok Lee, Keun
  • Machin, Stephen
  • D. Munk, Martin
  • Nybom, Martin
  • Ostrovsky, Yuri
  • Rahman, Sumaiya
  • Sirnio, Outi

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

  • Manduca, Robert & Hell, Maximilian & Adermon, Adrian & Blanden, Jo & Bratberg, Espen & C. Gielen, Anne & Van Kippersluis, Hans & Bok Lee, Keun & Machin, Stephen & D. Munk, Martin & Nybom, Martin & Ost, 2024. "Measuring absolute income mobility: lessons from North America and Europe," LSE Research Online Documents on Economics 122124, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:122124
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    References listed on IDEAS

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    1. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 205-230, Winter.
    2. Thomas Blanchet & Juliette Fournier & Thomas Piketty, 2022. "Generalized Pareto Curves: Theory and Applications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 263-288, March.
    3. Yonatan Berman, 2022. "The Long-Run Evolution of Absolute Intergenerational Mobility," American Economic Journal: Applied Economics, American Economic Association, vol. 14(3), pages 61-83, July.
    4. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation," Working Papers 811, Queen Mary University of London, School of Economics and Finance.
    5. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 205-230, Winter.
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    More about this item

    Keywords

    Consolidator grant ERC-2013-CoG-617965 (Sirniö). Page 1 of 130; 724363;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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