Measuring Absolute Income Mobility: Lessons from North America and Europe

Robert Manduca, Maximilian Hell, Adrian Adermon, Jo Blanden, Espen Bratberg, Anne Gielen, Hans van Kippersluis, Keunbok Lee, Stephen Machin, Martin D. Munk, Martin Nybom, Yuri Ostrovsky, Sumaiya Rahman and Outi Sirniö

American Economic Journal: Applied Economics, 2024, vol. 16, issue 2, 1-30

Abstract: We use linked parent-child administrative data for five countries in North America and Europe, as well as detailed survey data for two more, to investigate methodological challenges in the estimation of absolute income mobility. We show that the commonly used "copula and marginals" approximation methods perform well across countries in our sample, and the greatest challenges to their accuracy stem not from assumptions about relative mobility rates over time but from the use of nonrepresentative marginal income distributions. We also provide a multicountry analysis of sensitivity to specification decisions related to age of income measurement, income concept, family structure, and price index.

JEL-codes: D31 G51 I31 J12 J31 J62 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (3)

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DOI: 10.1257/app.20210137

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