TY - JOUR
T1 - Measuring Intergenerational Income Mobility
T2 - A Synthesis of Approaches
AU - Deutscher, Nathan
AU - Mazumder, Bhashkar
N1 - Publisher Copyright:
© 2023 American Economic Association. All rights reserved.
PY - 2023/9
Y1 - 2023/9
N2 - The literature on intergenerational income mobility uses a diverse set of measures and there is limited knowledge about whether these measures provide similar information and yield similar conclusions. We provide a framework to highlight the key concepts and properties of the different estimators. We then show how these measures relate to one another empirically. Our main analysis uses income tax data from Australia to produce a comprehensive set of empirical estimates for each of 19 different mobility measures at both the national and regional levels. We supplement this analysis with other data that uses either within- or between-country variation in mobility measures. A key finding is that there is a clear distinction between relative and absolute measures both conceptually and empirically. A region may be high with respect to absolute mobility but could be low with respect to relative mobility. However, within broad categories, the different mobility measures tend to be highly correlated. For rank-based estimators, we highlight the importance of how the choice of the distribution used for calculating ranks can play a critical role in determining its properties as well as affect empirical findings. These patterns of results are important for policymakers whose local economy might fare well according to some mobility indicators but not others.
AB - The literature on intergenerational income mobility uses a diverse set of measures and there is limited knowledge about whether these measures provide similar information and yield similar conclusions. We provide a framework to highlight the key concepts and properties of the different estimators. We then show how these measures relate to one another empirically. Our main analysis uses income tax data from Australia to produce a comprehensive set of empirical estimates for each of 19 different mobility measures at both the national and regional levels. We supplement this analysis with other data that uses either within- or between-country variation in mobility measures. A key finding is that there is a clear distinction between relative and absolute measures both conceptually and empirically. A region may be high with respect to absolute mobility but could be low with respect to relative mobility. However, within broad categories, the different mobility measures tend to be highly correlated. For rank-based estimators, we highlight the importance of how the choice of the distribution used for calculating ranks can play a critical role in determining its properties as well as affect empirical findings. These patterns of results are important for policymakers whose local economy might fare well according to some mobility indicators but not others.
UR - http://www.scopus.com/inward/record.url?scp=85169790418&partnerID=8YFLogxK
U2 - 10.1257/jel.20211413
DO - 10.1257/jel.20211413
M3 - Article
SN - 0022-0515
VL - 61
SP - 988
EP - 1036
JO - Journal of Economic Literature
JF - Journal of Economic Literature
IS - 3
ER -