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Trends in Individual Income Growth: Measurement Methods and British Evidence

  • Jenkins, Stephen P.

    ()

    (London School of Economics)

  • Van Kerm, Philippe

    ()

    (LISER (CEPS/INSTEAD))

Assessments of whose income growth is the greatest and whose is the smallest are typically based on comparisons of income changes for income groups (e.g. rich versus poor) or income values (e.g. quantiles). However, income group and quantile composition changes over time because of income mobility. To summarize patterns of income growth while also tracking the fortunes of the same individuals, a longitudinal perspective is required. For this case, we develop dominance conditions and summary indices for comparisons of distributions of individual income growth, together with associated methods of estimation and inference. Using these methods and data from the British Household Panel Survey, we study individual income growth for periods between 1991 and 2005. We show that income growth was significantly more pro-poor in the early years of the Labour government than in earlier Conservative years.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5510.

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Length: 55 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5510
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  1. Jenkins, Stephen P. & Van Kerm, Philippe, 2003. "Trends in Income Inequality, Pro-Poor Income Growth and Income Mobility," IZA Discussion Papers 904, Institute for the Study of Labor (IZA).
  2. Van Kerm, Philippe, 2009. "Income mobility profiles," Economics Letters, Elsevier, vol. 102(2), pages 93-95, February.
  3. B. Essama-Nssah & Peter J. Lambert, 2009. "Measuring Pro-Poorness: A Unifying Approach With New Results," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 752-778, 09.
  4. Jenkins, Stephen P., 2010. "The British Household Panel Survey and its Income Data," IZA Discussion Papers 5242, Institute for the Study of Labor (IZA).
  5. Daniele Checchi & Valentino Dardanoni, 2002. "Mobility comparisons: does using different measures matter?," Departmental Working Papers 2002-15, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  6. repec:hal:psewpa:halshs-00966324 is not listed on IDEAS
  7. 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.
  8. Michael Grimm, 2007. "Removing the anonymity axiom in assessing pro-poor growth," Journal of Economic Inequality, Springer, vol. 5(2), pages 179-197, August.
  9. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
  10. 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.
  11. Peter Gottschalk & Sheldon Danziger, 1999. "Income Mobility and Exits from Poverty of American Children, 1970-1992," Boston College Working Papers in Economics 430, Boston College Department of Economics, revised 15 Feb 2001.
  12. Chakravarty, S. R., 1984. "Normative indices for measuring social mobility," Economics Letters, Elsevier, vol. 15(1-2), pages 175-180.
  13. Gary Fields & Paul Cichello & Samuel Freije & Marta Menéndez & David Newhouse, 2003. "For Richer or for Poorer? Evidence from Indonesia, South Africa, Spain, and Venezuela," Journal of Economic Inequality, Springer, vol. 1(1), pages 67-99, April.
  14. Jenkins, Stephen P, 1997. "Trends in Real Income in Britain: A Microeconomic Analysis," Empirical Economics, Springer, vol. 22(4), pages 483-500.
  15. 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.
  16. Fields, Gary S. & Leary, Jesse B. & Ok, Efe A., 2002. "Stochastic dominance in mobility analysis," Economics Letters, Elsevier, vol. 75(3), pages 333-339, May.
  17. Lisa M. Dragoset & Gary S. Fields, 2006. "U.S. Earnings Mobility: Comparing Survey-Based and Administrative-Based Estimates," Working Papers 55, ECINEQ, Society for the Study of Economic Inequality.
  18. Fields, Gary S. & Ok, Efe A., 1996. "The Measurement of Income Mobility: An Introduction to the Literature," Working Papers 96-05, C.V. Starr Center for Applied Economics, New York University.
  19. Jenkins, Stephen P., 2011. "Changing Fortunes: Income Mobility and Poverty Dynamics in Britain," OUP Catalogue, Oxford University Press, number 9780199226436, March.
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