Measuring Absolute Income Mobility: Lessons from North America and Europe†

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

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)1-30
Number of pages30
JournalAmerican Economic Journal: Applied Economics
Volume16
Issue number2
DOIs
Publication statusPublished - Apr 2024

Bibliographical note

JEL Classification;
D31 Personal Income, Wealth, and Their Distributions
G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
I31 General Welfare; Well-Being
J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
J31 Wage Level and Structure; Wage Differentials
J62 Job, Occupational, and Intergenerational Mobility; Promotion

Publisher Copyright: © (2024), (American Economic Association). All Rights Reserved.

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