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What Lies Behind Income Mobility? Reranking and Distributional Change in Belgium, Western Germany and the USA
Author(s) -
Van Kerm Philippe
Publication year - 2004
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.0013-0427.2004.00367.x
Subject(s) - counterfactual thinking , income distribution , economics , econometrics , decomposition , distribution (mathematics) , demographic economics , mathematics , inequality , psychology , mathematical analysis , social psychology , ecology , biology
The paper presents a decomposition of income mobility indices into two basic sources: mobility induced by a change of the income distribution shape, and mobility induced by a reordering of individuals in the income pecking order. The decomposition procedure, based on counterfactual distributions, results in a decomposition that is applicable to a broad class of mobility measures. Application to income ‘movement’ indices with data for Belgium, Western Germany and the USA indicates that reranking has been the major force behind income mobility.