Measuring Income Mobility over Equivalent Adults

Antonio Abatemarco

No 2003-15, ISER working papers from Institute for Social and Economic Research

Abstract: The amount of flexibility in the "earnings market" has attracted the interest of many researchers during the last two decades. Given a heterogeneous population, it has been shown that results strongly depends on equivalence scales and related initial definitions. In this paper we argue that in order to rank income distributions over income mobility there are strong theoretical and empirical reasons to support the idea of equivalent adult. It is shown that the implementation of the individual equivalent income approach causes over-weightening of income mobility in the case of a high proportion of large families. Then, income mobility is estimated considering equivalent adults over seven countries and five waves (ECHP - PSID) in such a way to allow for an immediate comparison with existing empirical studies.

Date: 2003-05
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