A mobility decomposition of absolute measures of panel distributional change

Abstract

This paper proposes a decomposition of a general class of absolute measures of panel welfare change into growth, dispersion and exchange mobility components, which is useful for both intergenerational and intragenerational mobility assessments. We show that this decomposition is the only one within a broad set of possibilities that satisfies a key dispersion-sensitivity property and that prioritising improvements among those initially poorest is identical to a favourable view of exchange mobility.