Partial Identification of Economic Mobility: With an Application to the United States

Daniel Millimet, Hao Li and Punarjit Roychowdhury ()
Additional contact information
Hao Li: Nanjing Audit University
Punarjit Roychowdhury: Indian Institute of Management

No 12085, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The economic mobility of individuals and households is of fundamental interest. While many measures of economic mobility exist, reliance on transition matrices remains pervasive due to simplicity and ease of interpretation. However, estimation of transition matrices is complicated by the well-acknowledged problem of measurement error in self-reported and even administrative data. Existing methods of addressing measurement error are complex, rely on numerous strong assumptions, and often require data from more than two periods. In this paper, we investigate what can be learned about economic mobility as measured via transition matrices while formally accounting for measurement error in a reasonably trans- parent manner. To do so, we develop a nonparametric partial identification approach to bound transition probabilities under various assumptions on the measurement error and mobility processes. This approach is applied to panel data from the United States to explore short-run mobility before and after the Great Recession.

Keywords: partial identification; measurement error; mobility; transition matrices; poverty (search for similar items in EconPapers)
JEL-codes: C18 D31 I32 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2019-01
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Journal of Business & Economic Statistics, 2020, 38, 732-753

Downloads: (external link)
https://docs.iza.org/dp12085.pdf (application/pdf)

Related works:
Journal Article: Partial Identification of Economic Mobility: With an Application to the United States (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp12085

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().