Intragenerational Income Mobility Research Articles

The Application of Plural Panelist Synthesis Method in Identifying Determinant Factors That Influence Economic Growth

This research aims to study intra-generational income mobility and poverty, and it also seeks to characterize and measure individual mobility by analyzing the duration of poverty, consecutive versus transient poverty, and the likelihood of re-entry. Researchers used a synthetic panel approach to estimate individual income in the second round based on data from the first round. This approach allows research to look at changes in individual income over time, even though actual panel data is unavailable. Based on research results, it show that the main factor influencing stagnation is the difficulty of leaving poverty, not the problem of entering poverty. In addition, analyses that consider the entire period also provide different results regarding the level of permanence in poverty. Synthetic panel analysis shows that the individuals who move out of poverty are those who were poor at the start of each period studied, not those who already had incomes above the poverty line. In addition, these results also show that the proportion of individuals who experience poverty in a shorter period is greater than that of those who experience poverty for four years. The analysis shows changes in poverty dynamics between the two periods studied. Successive poverty dominates, meaning that individuals who fall into poverty tend to remain poor over that period. However, the predominance is shifting towards transient poverty, where individuals experience poverty for shorter periods, moving in and out of poverty within that period.

The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015)

Poland has experienced a very sharp rise in income and wealth inequality after the economic transition. We measure the relative persistence of income inequality and intra-generational income mobility in Poland during the period 2008-2015. Our research is based on the panel survey data, our subsample includes 501 households. To measure the persistence of income inequality we calculate Shorrocks’s R coefficient. We find that if inequality is measured by the Gini index the relative persistence of income inequality in Poland is similar to Western Europe. In the case of the Theil index and the Mean Log Deviation (MLD), the relative persistence is higher than in a majority of Western Europe countries and similar to the United Kingdom or the United States. The income distribution in Poland is rather stable. Income mobility is lowest at the bottom and at the top of the income distribution. In the middle (3rd) quintile upward mobility is higher than downward mobility. The short-term income mobility in Poland has not changed during and after the Great Financial Crisis and is still medium in comparison with the rest of Europe.

Far from home: migration, venture and income mobility

This work focuses on the role that interregional migration within a country can play in fostering intragenerational income mobility through its effect on households’ participation in business venture. Unique panel data on Chinese households from 2015 to 2019 identifies migration experience and provides detailed information on income and entrepreneurial activities. Our key finding is that migration increases upward economic mobility within cohorts by enhancing opportunities of entrepreneurship, and this pattern is more salient in regions with more severe inequality. Consequently, migrant population in these areas enjoy greater chances when climbing income ladders, which may further alleviate regional income inequality in the long run. The estimation results remain robust when winsorising income, using sub-samples of follow-up households in repeated surveys and altering the scale of income mobility. The analysis in this article, coupled with literature on migration and entrepreneurship, provides a new perspective on how free migration matters in improving intragenerational mobility and longer-term income distribution.

Absolute intragenerational income mobility in Iran

Absolute intragenerational income mobility (AIIM), defined as the percentage of households with higher income compared to their previous year, is a complementary index to aggregate measures such as income per capita and the Gini index to show a more detailed picture of an economy. Panel data on household income is necessary to estimate AIIM, but it is not usually available in developing countries and, in the long run, for most developed countries. In this paper, we employ copula modeling and cross-sectional income data in a developing country, Iran, and well approximate the mobility estimated by panel data for the years 2011–2019 and then utilize the copula method to extend our estimation backward until 1991. Our findings reveal that absolute intragenerational income mobility in Iran for urban households fluctuates between 40 % and 62 %. AIIM is higher for low-income households.

Intragenerational mobility and the concept of the equalization of longer-term incomes: An estimation for a developing country

This paper calculates the degree of intragenerational income mobility and carries out the decomposition of the influence of observable characteristics on income mobility. Using the concept of mobility as the equalization of longer-term incomes, we quantify the class of measures called the E index using administrative records for social security contributions of formally employed young adults in Colombia between 2010 and 2018. In addition, we use the Recentered Influence Function (RIF) decomposition method to extend its application to the E index and decompose the influence of observable characteristics on our estimates. Our findings indicate Colombia's mobility is disequalizing. We also show that female mobility is even more disequalizing than male mobility. Our decomposition shows that disequalizing mobility depends on employees' type of contract, economic sector, and location.

Income inequality and intragenerational income mobility in Sweden from 1983 to 2010: Following two birth cohorts

Sweden has been known for having one of the most equal income distributions in the world. However, in recent decades, Sweden has experienced increasing income inequality. An alternative way of measuring the development of inequality is to study and compare the income development within and between two birth cohorts according to gender and different positions of income distribution. The focus in this paper is to study how individual disposable personal income has changed by aging and at various positions of the income distribution, as well as the gender disposable income gap and intragenerational income mobility. Three positions of the income distribution were chosen: percentile 10; median; and percentile 99. Two cohorts, including all individuals born in 1948 and 1958, were tracked from 35 years of age to 53 years of age – with two 18-year overlapping periods, 1983–2000, and 1993–2010. The results show a complex and multifaceted image of the development of income inequality and mobility, within and between the two birth cohorts. Especially male low-income earners, born 1958, have been left behind. Income mobility differ according to gender where women have increased mobility in the bottom quintile and decreased in the top quintile, men experienced the opposite. When modelling mobility education have decreased to contribute to an upward mobility, especial for cohort born 1958. Taking all the results together, the development of increasing income inequality in Sweden is apparent.

International Economic Sanctions and Income Mobility: Evidence from a Natural Experiment

This paper, for the first time, studies the impact of international economic sanctions on income mobility. The United Nations Security Council imposed a series of sanctions on Iran from the end of 2006 to 2015 and then lifted them to some extent in 2016. We employ 20 household surveys of income and expenditures collected by the Statistical Center of Iran from 1999 through 2018 to analyze the impact of the sanctions on intra-generational income mobility. We use various empirical methods to see how mobility varies by the imposition/removal of sanctions. All methods show that the sanctions affect all income groups adversely in one or two years. With the removal of sanctions in 2016, all people experience upward mobility, although they do not return to their pre-sanctions status.

Linked Lives, Linked Trajectories: Intergenerational Association of Intragenerational Income Mobility

Most intergenerational mobility studies rely on either snapshot or time-averaged measures of earnings, but have yet to examine resemblance of earnings trajectories over the life course of successive generations. We propose a linked trajectory mobility approach that decomposes the progression of economic status over two generations into associations in four life-cycle dimensions: initial position, growth rate, growth deceleration, and volatility. Using father-son dyad data from the Panel Study of Income Dynamics, we show that men resemble their fathers not only in the overall level of earnings but also in the pattern by which their earnings develop over time. The intergenerational persistence of earnings varies substantially across life stages of both generations; it is strongest for fathers’ early-career and sons’ mid-career, with an intergenerational elasticity (IGE) as high as .6. This result can be explained by the concurrence of the parent’s early career and the offspring’s early childhood. Our findings suggest the intergenerational economic association between parents and offspring is not age-constant but is contingent on the respective life stages of both generations and, most importantly, the period during which they overlap.

Social Policy and Income Mobility: An Interprovincial Perspective

In this article, I analyse intragenerational income mobility and the long-term dynamics of poverty. The proposed analysis is based on the Longitudinal and International Study of Adults and covers the period from 1983 to 2011. This period encompasses major social reforms that were implemented in Quebec and Ontario in the 1990s. In Quebec, several innovative policies were implemented with the aim of promoting the integration of economically disadvantaged people into the labour market. In Ontario, the government instead relied on coercive policies to achieve the same ends. The analysis proposes to indirectly investigate the effects of these reforms on income mobility and poverty dynamics. To do this, I present a Quebec–Ontario comparative study using several distinct cohorts. Although many studies have found that income disparities and relative poverty are lower in Quebec, the data do not allow me to conclude that the policies that were implemented in Quebec have had a significant effect on social mobility or on the dynamics of poverty.

The Dynamics of Income Inequality: The Case of China in a Comparative Perspective

We compare household income panel data from China, Germany, the United Kingdom, and the United States. Consistent with previous research, we show that income is more unequally distributed in China than in the three Western countries. But China also has a higher level of intra-generational income mobility. Because mobility tends to have an income-equalizing effect, the snapshot measures of inequality overstate the true level of inequality in China to a greater degree than they do for the other countries. But even after we have taken into account the impact of mobility, permanent income is still more unequally distributed in China than in the United States, the United Kingdom, and Germany. Moreover, in the three Western countries, the lion’s share of income inequality is between individuals rather than within individual. The opposite holds for China. We also show that the most important determinants of income inequality in China are those long-standing institutions that predate the market reform.

Short-Term Household Income Mobility Before and After the Great Recession: A Four-Country Study

This paper analyses short-term intra-generational income mobility in France, Italy, Spain and the UK by exploiting the longitudinal component of EU-SILC for the periods 2005-2008 and 2012-2015. We investigate whether and to what extent the ability of households to move along the income distribution changed after the 2008 crisis and whether heterogeneities among countries exist. For this purpose, we employ mobility indexes and transition matrices as well as estimation of a 2SLS regression and of a dynamic ordered probit with random effects. Overall, indexes and transition matrices point to a decrease of mobility in the aftermath of the crisis. The econometric analyses suggest both the existence of a convergence process of incomes and state dependence of current and lagged income in both periods. We also observe sluggish income convergence and lower upward mobility in the second period. Among the microeconomic drivers, education and employment status are positive determinants of mobility. Finally, our results confirm cross-country heterogeneity.

What Do We Really Know About Income Mobility in Korea?

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.

Income and Earnings Mobility in U.S. Tax Data

We use a large panel of federal income tax data to investigate intragenerational income mobility in the United States. We have two primary objectives. First, we explore the determinants of two-year changes in individual labor earnings and family incomes, such as job or industry changes, marriage, divorce, and geographic mobility. Second, we evaluate how federal income taxes stabilize or destabilize post-tax income changes relative to pre-tax changes. We find a relatively high degree of income mobility, with almost half of workers exhibiting earnings increases or decreases of at least 25 percent, and two-fifths of tax units experiencing income changes of this magnitude. Male and female labor income mobility patterns are remarkably similar, though marriage is associated with earnings gains among men, but is associated with modest earnings declines among women. We also observe that large income gains are most likely among families that add workers -- either through marriage or through a second family member entering the workforce.

Income and Earnings Mobility in U.S. Tax Data

We use a large panel of federal income tax data to investigate intragenerational income mobility in the United States. We have two primary objectives. First, we explore the determinants of two year changes in individual labor earnings and family incomes, such as job or industry changes, marriage, divorce, and geographic mobility. Second, we evaluate how federal income taxes stabilize or destabilize post-tax income changes relative to pre-tax changes. We find a relatively high degree of income mobility, with almost half of workers exhibiting earnings increases or decreases of at least 25 percent, and two-fifths of tax units experiencing income changes of this magnitude. Male and female labor income mobility patterns are remarkably similar, though marriage is associated with earnings gains among men, but is associated with modest earnings declines among women. We also observe that large income gains are most likely among families that add workers – either through marriage or through a second family member entering the workforce.

Income and Earnings Mobility in U.S. Tax Data

We use a large panel of federal income tax data to investigate intragenerational income mobility in the United States. We have two primary objectives. First, we explore the determinants of two-year changes in individual labor earnings and family incomes, such as job or industry changes, marriage, divorce, and geographic mobility. Second, we evaluate how federal income taxes stabilize or destabilize post-tax income changes relative to pre-tax changes. We find a relatively high degree of income mobility, with almost half of workers exhibiting earnings increases or decreases of at least 25 percent, and two-fifths of tax units experiencing income changes of this magnitude. Male and female labor income mobility patterns are remarkably similar, though marriage is associated with earnings gains among men, but is associated with modest earnings declines among women. We also observe that large income gains are most likely among families that add workers - either through marriage or through a second family member entering the workforce.

Intragenerational Income Mobility in Gothenburg, Sweden, 1925–94: Before, during, and after the Rise of the Welfare State

This article compares income mobility at the household level using tax data for Gothenburg, Sweden, from 1925 to 1994. Income mobility is defined as changes in household disposable equivalent income over time. Results indicate extensive income mobility over time. Income mobility is often linked to the life cycle, and three classic poverty risks – childhood, starting a family, and old age – have been reduced. Results also show the emergence of two new poverty risks – young adulthood and family‐building for immigrants – challenges that need to be addressed by future policy prescriptions.

Income Mobility in Costa Rica, 2001-2007

En este artículo se estudia la movilidad interanual o intrageneracional del ingreso en Costa<br />Rica. Para ello, se utilizan datos de panel construidos a partir de las Encuestas de Hogares<br />de Propósitos Múltiples correspondientes a los años del 2001 al 2007, que permiten darle<br />seguimiento a los mismos hogares y personas año con año. Se encontró que existe una<br />sustancial movilidad de ingresos interanual, particularmente en el segmento medio<br />de la distribución del ingreso. También se identificaron los factores que más afectan la<br />movilidad interanual del ingreso en Costa Rica. Se encontró que el ingreso per cápita es<br />condicionalmente convergente, esto es, las familias de bajos ingresos son más propensas a<br />experimentar aumentos mayores en sus ingresos que las familias de alto ingreso. Además<br />del ingreso per cápita inicial, los tres factores más importantes que explican los cambios<br />en los ingresos per cápita en Costa Rica son los siguientes, en orden de importancia: (1) cambios en la situación de empleo de los miembros del hogar; (2) cambios en el número de dependientes (niños, adultos mayores y miembros inactivos económicamente) en la familia; y (3) la educación de los miembros, particularmente la del jefe del hogar.<p> </p>

Lifetime Versus Annual Tax Progressivity: Sweden, 1968-2009

This paper analyzes the evolution of tax progressivity in Sweden from both annual and lifetime perspectives. Using a rich micro panel with administrative records of incomes, taxes and benefits over the period 1968–2009, we calculate tax rates across the income distribution accounting for different tax bases as well as the role of transfers. The uniquely long time span also allows us to compute tax progressivity as realized over a cohort's entire life cycle. Our main finding is that taxes are considerably less progressive over the lifetime than in any single year. In fact, life cycle taxes are close to proportional, bearing a redistributive effect of only a few percent. Intragenerational income mobility seems to be driving this result, although the Swedish economic crisis of the 1990s and the tax reforms of 1971 and 1991 are also important. Labor income taxes contribute less to progressivity in recent years, whereas transfers to unemployed and old-age pensioners have become increasingly important. These findings are robust to the use of different tax rates, tax bases, sample populations, rates of discounting and controls for reranking.

Trends in Intragenerational Income Mobility in the Western States of Germany and the United States (1984 – 2006)

Abstract Using the Shorrocks R, we compare trends in intragenerational income mobility for the western states of Germany and the United States (1984 – 2006) and test the sensitivity of our results to the starting point and number of years considered. We find that our mobility estimates do not converge to a constant over time so the starting year chosen for the analysis matters. We conclude that income mobility declined in the western states of Germany over time and is now much closer to income mobility in the United States than was the case in the 1980s. JEL Codes: J6, Z13

Mobilidade intrageracional de renda no Brasil

Este estudo busca mensurar o grau de mobilidade intrageracional de renda no Brasil e em seus diversos subgrupos populacionais, no período de 1995 a 2005. Para tanto, serão considerados a abordagem axiomática da mobilidade e o instrumental dinâmico proposto por Aebi et al. (1999). Os cálculos da matriz de transção markoviana e dos índices de mobilidade indicam que o Brasil apresenta uma baixa mobilidade intrageracional de renda, sugerindo que sua estrutura social é relativamente rígida. Constatou-se, também, importantes heterogeneidades dentro de cada subgrupo, corroborando os resultados intergeracionais apontados por Ferreira e Veloso (2006).