Rank-correlations are not robust to differences in group inequality

Mikkel Gandil ()

The Journal of Economic Inequality, 2023, vol. 21, issue 1, No 8, 217 pages

Abstract: Abstract Rank-based measures of intergenerational mobility are generally justified by their invariance to changes in inequality. However, I show that whenever the source of inequality is uncorrelated to parent ranks, such as in the cases of gender and birth order, increasing equality leads to a fall in rank mobility as measured by the rank correlation. I develop a method to ex-post quantify the importance of inequality for mobility measurement using cross-sectional income distributions and show that US income mobility could have fallen by as much as 24 percent since 1970 due to increased gender equality. Without specifying a policy objective of interest, it is therefore unclear which conclusions to draw from differences in rank-correlations across societies or from changes over time.

Keywords: Economic inequality; Gender inequality; Intergenerational mobility; Mobility measurement; Rank-correlation; Wealth inequality (search for similar items in EconPapers)
JEL-codes: C63 D31 E24 J16 J62 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10888-022-09550-w

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