Income Inequality and Intergenerational Mobility in India

Abstract

The rise in income inequality coupled with an increase in GDP per capita is attributed to the degree of intergenerational income mobility (IGIM). The main purpose of this article is to examine the relationship between income inequality and IGIM in India. Using the unit-level records of National Sample Survey data, the present study attempts to examine relative and absolute income mobility by way of segregating generations into social groups and income classes. The originality of the article lies in assessing the IGIM using different approaches, which will contribute to the existing literature. We conclude that the country has low-income mobility and high inequality which is no longer associated with a particular social group in India. Moreover, the relationship between income inequality and intergenerational mobility is both negative and positive. JEL Codes: D63, J62, R13