Summary Measures of Equalising Mobility

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Chapter 9 in Comparing Income Distributions, 2023, pp 203-218 from Edward Elgar Publishing

Abstract: Chapter 9 extends the ‘Three "I"s of Mobility’ framework, discussed in Chapter 8, by proposing associated quantitative summary measures of equalising mobility between two periods. The chapter shows that measures can be based, as in the famous Lorenz curve used to depict cross-sectional inequality, on areas within the diagram. These are area measures of the area distance from the TIM curve to two alternative curves which depict, in different senses, hypothetical extreme equalising mobility cases. The first case involves the equalisation of incomes in the second period, such that all second-period incomes are equal to the actual average, and the average growth rate is equal to the actual average growth over the relevant period. This involves a compression of incomes and no re-ranking. If second-period equality is treated as extreme equalisation, then any re-ranking of incomes (generated by non-systematic changes) can be regarded as frustrating redistribution. The second concept involves a different concept of maximum redistribution, defined in terms of the inequality of incomes measured over the two periods combined. This hypothetical extreme involves a combination of differential income growth with maximum re-ranking, whereby second-period incomes are swapped, such that the richest person becomes the poorest, and so on. In this case, maximum re-ranking is viewed as a fundamental component of equalising change.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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