Measuring Intergenerational Income Mobility: A Synthesis of Approaches
Journal of Economic Literature
no. 3, September 2023
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.
Deutscher, Nathan, and Bhashkar Mazumder.
"Measuring Intergenerational Income Mobility: A Synthesis of Approaches."
Journal of Economic Literature,
Personal Income, Wealth, and Their Distributions
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Measurement and Analysis of Poverty
Job, Occupational, and Intergenerational Mobility; Promotion