Integrating economic mobility into the Public Goods Game: the effect on cooperation

This study analyzes regional differences in intergenerational income mobility using National Health Insurance big data, aiming to understand the causes of the worsening public perception of opportunity inequality. Specifically, the study calculates relative income mobility through regression analysis of income percentile of parents' and children's, and absolute income mobility using the average income percentile of children from the bottom 25% of income households. Additionally, as a preliminary analysis to identify the causes of regional differences in income mobility, the study examines correlations between income mobility and regional characteristics such as income inequality, spatial segregation index. The analysis found that, at the national level, intergenerational income mobility showed little change over time, and there was not much difference based on the type of health insurance subscriber. In particular, the absolute level of relative income mobility was not very high. However, intergenerational income mobility by region was found to be particularly poor in large cities such as Seoul, Gyeonggi, Daegu, and Daejeon. Moreover, the correlation analysis with regional characteristics showed that regions with higher income inequality and greater spatial segregation tended to have lower relative income mobility. For absolute income mobility, similar trends were observed, but statistically, the findings were not significant.

We examine how intergenerational mobility affects subjective wellbeing (SWB) using data from the British Cohort Study. Our SWB measures encapsulates both life satisfaction and mental health, and we consider both relative and absolute movements in income. We find that relative income mobility is a significant predictor of life satisfaction and mental health, whether people move upward or downward. For absolute income, mobility is only a consistent predictor of SWB and mental health outcomes if the person moves downwards, and in this case the impact is far larger than relative mobility. For both relative and income mobility downward movements affect SWB to a greater extent than upward movements, consistent with notions of loss aversion. Notably, we find that social class mobility does not affect SWB. We present evidence that the significant relative and absolute mobility effects we find operate partially through financial perceptions and consumption changes which can occur because of income mobility.

We examine how intergenerational mobility impacts on subjective wellbeing (SWB) drawing on data from the British Cohort Study. Our SWB measures encapsulate both life satisfaction and mental health, and we consider both relative and absolute movements in income. We find that relative income mobility is a significant predictor of life satisfaction and mental health, whether people move upward or downward. For absolute income, mobility is only a consistent predictor of SWB and mental health outcomes if the person moves downwards, and in this case the impact is far larger than relative mobility. For both relative and income mobility, downward movements impact SWB to a greater extent than upward movements, consistent with exhibiting loss aversion. Notably, we find that social class mobility does not affect SWB. We present evidence that the significant relative and absolute mobility effects we find operate partially through financial perceptions and consumption changes which can occur because of income mobility.

This paper focuses on income inequality and intergenerational mobility in Bangladesh and selected countries. Using mainly the Global Database on Intergenerational Mobility, produced by the World Bank, the paper compares the performance of Bangladesh in absolute and relative mobility in education and income with selected countries. The paper also estimates simple and “augmented Gatsby equations” to examine the relationship between income inequality and relative mobility in education and income. The paper finds that Bangladesh has made significant progress in upward mobility in education, especially for girls. However, relative upward economic mobility in Bangladesh remains low. The paper also finds that income inequality has no significant impact on relative mobility in education among a cross-section of countries. However, the regression results for “Gatsby equations” support the hypotheses that a) as inequality rises, relative mobility in income falls, and b) as per capita income rises, relative mobility in income rises.

Using household surveys from Argentina, Brazil, Peru, Ecuador, and El Salvador, this paper assesses the contribution of entrepreneurship to socioeconomic mobility and to understand the main variables associated with entrepreneurial propensity in selected Latin American countries. It is found that, at the aggregate regional level, income mobility is rather modest and that entrepreneurs do not outperform the rest of the population. However, entrepreneurs tend to perform as well as or better than non-entrepreneurs in countries where relative income mobility is moderate. In countries where relative income mobility is rather low, entrepreneurs tend to show less income mobility. Entrepreneurial propensity is rather modest, at 10 percent of the population. University graduates show the highest propensity in most of the countries studied, while women and young people were found to have the lowest entrepreneurial propensity.

Using household surveys from Argentina, Brazil, Peru, Ecuador, and El Salvador, this paper assesses the contribution of entrepreneurship to socioeconomic mobility and to understand the main variables associated with entrepreneurial propensity in selected Latin American countries. It is found that, at the aggregate regional level, income mobility is rather modest and that entrepreneurs do not outperform the rest of the population. However, entrepreneurs tend to perform as well as or better than non-entrepreneurs in countries where relative income mobility is moderate. In countries where relative income mobility is rather low, entrepreneurs tend to show less income mobility. Entrepreneurial propensity is rather modest, at 10 percent of the population. University graduates show the highest propensity in most of the countries studied, while women and young people were found to have the lowest entrepreneurial propensity.

Alluding to theories about relative economic status and behavior, this paper studies if relative income mobility, or the intergenerational change in income positions, affects interpersonal trust. Empirically, the question is brought down to an application with US General Social Survey data. For the identification of a causal relationship, I use a structural approach and estimate a recursive bivariate probit that controls for selection on unobservables. Results suggest that trust increases if children have achieved an upward income movement away from their parents’ income position, and it decreases with the experience of downward income mobility. Policy implications are also discussed. JEL codes: H8; O4; Z00

This paper explores the relationship between economic growth and intergenerational mobility in the United States. Data from metropolitan statistical areas in the U.S. is used to examine how two measures of intergenerational mobility impact growth rates. More precisely, I examine how absolute income mobility and relative income mobility are related the growth rate of real gross metropolitan product (RGMP) from 2001 to 2011. I find that absolute mobility has a positive relationship with RGMP growth over the time period, and that relative mobility exhibits a negative relationship with RGMP. Results are found to be robust to two stage least squares estimation.

STUDIES ANALYSING THE INCOME and expenditure patterns of Eastern and Central European households in the early 1990s revealed that inequality had increased while mobility of income and expenditure had also grown.' Changes in income inequality in itself are not enough to give a real picture of relative income changes: increasing inequality coupled with increasing mobility can be a more positive path for a society than increasing inequality coupled with decreasing mobility. In this study income mobility means the size of the changes in relative income positions of people from year to year. At the beginning of the transition the economic changes and reforms created new opportunities and increased the ability of people to change their position on the income ladder. This article analyses the development of inequality and income mobility after the initial period of transition in Hungary. We concentrate on investigating income and expenditure inequalities and mobility together, focusing on the period after the transitional recession in Hungary. For this investigation we use household panel data. While concentrating on Hungary, we do not totally ignore related international research which covers income and expenditure inequalities and mobility together.2 Little is known on expenditure inequality in Hungary but this is definitely not the case for other East European countries in the region.3 People find it hard to get over a situation in which they perceive that their neighbours are overtaking them in the income, and even more so in the consumption, hierarchy. In an expanding economy, where growth in income is an accessible aim for most households, the problem arises more bluntly. However, in an economy shrinking for a longer period, growth, even if ever so small, becomes a sensitive issue and may be the source of social tensions. Relative mobility was made particularly acute in Hungary in the 1990s by the fact that the average household saw its real income decline significantly. As the 1995 stabilisation programme took place in the middle of the period under review, we aimed to create a set of tools to describe the impact of this short-term but drastic and complex phenomenon. To analyse mobility we use an innovative method similar to the traditional transition matrices.

Alluding to theories about relative economic status and behavior, this paper studies if relative income mobility, or the intergenerational change in income positions, affects interpersonal trust. Empirically, the question is brought down to an application with US General Social Survey data. For the identification of a causal relationship, I use a structural approach and estimate a recursive bivariate probit that controls for selection on unobservables. Results suggest that trust increases if children have achieved an upward income movement away from their parents' income position, and it decreases with the experience of downward income mobility. Policy implications are also discussed.

Striving and Thriving: A Life Course Trade-Off?

Using results from two treatment arms of a larger nationwide survey experiment in the United States, we add evidence on how Americans perceive social mobility. In one arm, respondents estimate both upward and downward relative economic mobility, while in the other, respondents estimate the absolute economic mobility (that is, do children out-earn their parents?) for each quintile of the parental income distribution. This latter question has been overlooked in the literature. We find respondentsʻ average estimates of relative downward mobility to be remarkably close to reality. The average estimate of relative upward mobility is also close, though both estimates underestimate relative mobility. There are small partisan differences in accuracy on relative mobility, with Republican-leaning respondents providing the most accurate estimates, but respondentsʻ perception of absolute mobility significantly underestimate (overestimate) mobility for the poorest (highest-income) children irrespective of partisan affiliation. Our results provide important insights on the implementation of redistribution policies.

Although many studies show that Korea’s income mobility is declining, it is difficult to draw organized information from previous studies, primarily because the mobility concept is inherently multi-faceted, and different researchers convey different meanings using the same terminology. To systemically examine the findings of previous studies and check the status of income mobility in Korea, this study categorizes the mobility concept using two dimensions: absolute vs. relative and within-generation vs. between-generations. The normative validity is clearer for intergenerational income mobility than in the intragenerational sense. In contrast, to determine whether intergenerational relative income mobility is deteriorating empirically requires further study using big data, while the decrease in intergenerational absolute income mobility and intragenerational income mobility is relatively clear.

Based on the lasting income hypothesis and Galton income average model, this paper summarizes the mechanism of the effect of tax on income mobility. Then it analyzes the linkage between dimensional income mobility and tax policy by systematic dynamic panel GMM model and panel Logistic regression in order. It arrives at the following conclusions: firstly, tax burden is one of the key reasons for affecting absolute and relative income mobility of urban residents; the interacting intensity is mostly determined by family workforce structure in the various regions; the reduction in tax burden increases absolute regional income mobility and reduces the upward probability of place when regional average family employed members are less than two, which are the opposite of the results when regional average family employed members are equal to or more than two. Secondly, absolute income mobility and upward probability of income place are less than ones in other provinces with higher proportion of deduction standard of individual income tax to family monthly income per capita. Thirdly, the reform of individual income tax has the significantly positive effect on the increase in absolute income mobility each year. In addition, the effects of the factors such as years of education, structure of income sources, industrial structure, and the degree of urbanization on income mobility present the characteristics of the stages and regional heterogeneity. It means that the tax system should give family and regional characteristics considerable prominence, focus on horizontal and vertical equity tax principle, promote the flow of residents' income between regions, lower income curing degree, and realize the dynamic equilibrium of income distribution.

There is vast literature examining how households’ income and consumption change over the life cycle. These studies, however, are usually restricted to developed economies. The main objective of this paper is to add to this literature by investigating the life cycle profiles and relative income mobility in a transition economy, facing rapid structural economic and social changes, such as Poland. It is shown that, in contrast to the US, where income inequality over the life cycle follows a roughly linear trend, the age-variance profile of income in Poland is hump-shaped. This finding might indicate that the income process at a micro level in Poland exhibits less persistence than in the US. The estimates of relative income mobility confirm this conjecture.