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Local versus Global Assessment of Mobility

Local versus Global Assessment of Mobility
Local versus Global Assessment of Mobility
Mobility indices are popular tools designed to quantify the extent of income changes by aggregating "local" distributional change into a "global" scalar according to some rule. For some mobility measures, this aggregation rule is only implicit in their standard definition. We derive an insightful approximation to the (statistical) aggregation rule for the important class of mobility indices introduced by Shorrocks (Journal of Economic Theory 19 (1978), 376–93) and further generalized by Maasoumi and Zandvakili (Economic Letters 22 (1986), 97–102), which enables us to characterize their normative properties.
We also develop methods for estimation and inference. A substantive empirical contribution emerges from the comparison of mobility between the United States and Germany. Our methods reveal why income mobility is higher in Germany than in the United States: Higher German mobility in the bottom of the distribution is combined with an implicitly higher weighting by the mobility index at the bottom.
0020-6598
1313-1336
Schluter, Christian
ae043254-4cc4-48aa-abad-56a36554de2b
Trede, Mark
7233d600-13a2-4c24-ae9d-16aed9bfca30
Schluter, Christian
ae043254-4cc4-48aa-abad-56a36554de2b
Trede, Mark
7233d600-13a2-4c24-ae9d-16aed9bfca30

Schluter, Christian and Trede, Mark (2003) Local versus Global Assessment of Mobility. International Economic Review, 44 (4), 1313-1336. (doi:10.1111/1468-2354.t01-1-00111).

Record type: Article

Abstract

Mobility indices are popular tools designed to quantify the extent of income changes by aggregating "local" distributional change into a "global" scalar according to some rule. For some mobility measures, this aggregation rule is only implicit in their standard definition. We derive an insightful approximation to the (statistical) aggregation rule for the important class of mobility indices introduced by Shorrocks (Journal of Economic Theory 19 (1978), 376–93) and further generalized by Maasoumi and Zandvakili (Economic Letters 22 (1986), 97–102), which enables us to characterize their normative properties.
We also develop methods for estimation and inference. A substantive empirical contribution emerges from the comparison of mobility between the United States and Germany. Our methods reveal why income mobility is higher in Germany than in the United States: Higher German mobility in the bottom of the distribution is combined with an implicitly higher weighting by the mobility index at the bottom.

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Published date: 2003

Identifiers

Local EPrints ID: 33394
URI: http://eprints.soton.ac.uk/id/eprint/33394
ISSN: 0020-6598
PURE UUID: f88103d9-7d52-4896-be15-70a5d51cd9f2

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Date deposited: 16 May 2006
Last modified: 15 Mar 2024 07:43

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Author: Mark Trede

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