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Income Mobility: Concepts and Measures

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People’s economic positions may change for a variety of reasons. The economy in which they participate may improve or deteriorate because of macroeconomic growth or contraction, employer-specific events and circumstances, business expansions and contractions, and ups and downs in local communities. Individuals may experience major life events with important economic consequences, among them completion of schooling, promotions and other movements up the career ladder, marriage and divorce, poor health, and retirement. Economic mobility studies are concerned with quantifying the movement of given recipient units through the distribution of economic well-being over time, establishing how dependent ones current economic position is on one’s past position, and relating people’s mobility experiences to the various influences that have been mentioned. Four methodological aspects of these studies are worth highlighting. First, mobility analysis follows given economic units through time. Consequently, longitudinal (or panel) data are required for research, which makes mobility analysis different from the measurement of poverty, inequality, or economic well-being. Second, mobility analysis can be applied to a variety of recipient units. Those most commonly used are individuals and households. Third, any aspect of economic well-being can be used. Among those that are studied are the income, earnings, expenditures, or occupational attainment of the individual or household. When income and expenditures are used, the data are often per capita. Any measure in dollars should be in real dollars, adjusted for inflation. Finally, I shall limit my attention to the recipient s economic well-being in a base year versus a final year. Other mobility studies assess mobility by looking at economic position in each of T years, but I shall not deal with those studies or measures.

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2000-01-01

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income mobility; individuals; households; economic well-being

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Required Publisher Statement: © The Brookings Institution Press. Final version published as: Fields, G. S. (2000). Income mobility: Concepts and measures: Patterns and underlying causes. In N. Birdsall & C. Graham (Eds.), New markets, new opportunities? Economic and social mobility in a changing world (pp. 101-132). Washington, DC: The Brookings Institution Press. Reprinted with permission. All rights reserved.

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