Mobility as Positional Change

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Chapter 10 in Comparing Income Distributions, 2023, pp 219-234 from Edward Elgar Publishing

Abstract: Chapter 10 turns to the analysis of income mobility in terms of re-ranking or positional changes. Individuals can move to higher or lower rank positions, so that the explicit treatment of the direction of change becomes important. Defining a re-ranking mobility index, it is therefore first necessary to decide whether negative re-ranking (dropping down the ranking) is treated symmetrically with positive (upward) movement within the ranking. A second issue concerns the choice of whose mobility is to be included. This chapter proposes a simple illustrative device for positional mobility. The chapter shows how a re-ranking mobility curve, analogous to the TIM curve, can illustrate the incidence, intensity and inequality of positional mobility in the form of re-ranking. This plots the cumulative degree of re-ranking against the cumulative proportion of the population (from lowest to highest incomes). Additionally, since for any given fraction of the population there is a different maximum possible extent of re-ranking, it is useful to consider the cumulative ratio of actual-to-maximum re-ranking against the cumulative proportion of the population. Empirical illustrations revealing a high degree of positional mobility, compared to the maximum possible, among the lowest and highest income individuals. This highlights how some conclusions regarding the extent of re-ranking depend crucially on the re-ranking measure adopted - positive, net or absolute.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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