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On the Evaluation of Economic Mobility

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  • Peter T. Gottschalk
  • Enrico Spolaore

Abstract

NOTE: This paper was updated 4/11/2001. This paper presents a framework for the evaluation and measurement of reversal and origin independence as separate aspects of economic mobility. We show how that evaluation depends on aversion to multi-period inequality, aversion to inter-temporal fluctuations, and aversion to second-period risk. We construct extended Atkinson indices that allow us to quantify the relative impact of reversal and time independence. We apply our approach to the comparison of income mobility in Germany and in the United States. We find that the ranking of Germany and the U.S. on the extent of reversal depends on the degree of aversion to inequality. Reversal has a higher impact in the U.S. than in Germany for lower degrees of aversion to multi-period inequality, while reversal has higher impact in Germany for higher degrees of inequality aversion. By contrast, Americans gain more than Germans from origin independence for a large range of degrees of inequality aversion.

Suggested Citation

  • Peter T. Gottschalk & Enrico Spolaore, 2000. "On the Evaluation of Economic Mobility," JCPR Working Papers 185, Northwestern University/University of Chicago Joint Center for Poverty Research.
  • Handle: RePEc:wop:jopovw:185
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    More about this item

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

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