Earnings Mobility and Measurement Error : A Pseudo-Panel Approach

• Tác giả: Francisca Antman
• Ngôn ngữ: eng
• Ký hiệu phân loại: 001.43 Historical, descriptive, experimental methods
• Thông tin xuất bản: World Bank, Washington, DC, 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 319653
• Chủ đề: 1. ABSOLUTE VALUE; 2. ASSET HOLDINGS; 3. AVERAGE INCOME; 4. CITIES; 5. CONDITIONAL CONVERGENCE

Tóm tắt

The degree of mobility in incomes is often seen as an important measure of the equality of opportunity in a society and of the flexibility and freedom of its labor market. But estimation of mobility using panel data is biased by the presence of measurement error and non-random attrition from the panel. This paper shows that dynamic pseudo-panel methods can be used to consistently estimate measures of absolute and conditional mobility in the presence of non-classical measurement errors. These methods are applied to data on earnings from a Mexican quarterly rotating panel. Absolute mobility in earnings is found to be very low in Mexico, suggesting that the high level of inequality found in the cross-section will persist over time. However, the paper finds conditional mobility to be high, so that households are able to recover quickly from earnings shocks. These findings suggest a role for policies which address underlying inequalities in earnings opportunities.