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Niny Khor and John Pencavel

In the United States, there is little difference in annual income inequality and income mobility between the rural and urban sectors of the economy. This forms a sharp…

Abstract

In the United States, there is little difference in annual income inequality and income mobility between the rural and urban sectors of the economy. This forms a sharp contrast with China where income inequality is greater and income mobility lower among rural households than among urban households. When incomes are averaged over three years and when adjustments are made for the size and composition of households, income inequality among all households differs little between China and the United States in the 1990s. Moreover when pooling rural households and urban households and when measuring annual income inequality and income mobility of the pooled households, the mobility of incomes of households in the United States differs little from that in China. Social welfare functions are posited that allow for a trade-off between increases in income and increases in income inequality. These suggest strong increases in well-being for urban households in China. The corresponding changes in rural China and in the United States are smaller. Four sets of data on households are drawn on to document these findings.

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Jobs, Training, and Worker Well-being
Type: Book
ISBN: 978-1-84950-766-0

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Gabriela Freitas da Cruz and Valeria Pero

Income inequality in Brazil is high and persistent, explained at least in part by low intergenerational income mobility. Despite the increasing female labor participation…

Abstract

Income inequality in Brazil is high and persistent, explained at least in part by low intergenerational income mobility. Despite the increasing female labor participation, most of the studies consider only father’s income to analyze intergenerational mobility. This chapter aims to analyze the role of mothers in intergenerational income mobility and the differences in mobility patterns between daughters and sons in Brazil. We use information from social mobility supplement of 2014 National Household Sample Survey to estimate intergenerational elasticity of labor income. The results show that the relation between mothers’ and children’s income is almost as high as that of fathers, especially for daughters. Mobility patterns’ analysis reveals no significant differences between daughters and sons. However, gender income inequalities are more pronounced for women from poor families. As returns to education are increasing, the educational advantage of female over male workers seems to offset gender gap for those of richer families. Moreover, the educational mobility between generations was higher for daughters than for sons. Despite that, daughters did not experience greater income mobility than sons. These results suggest that equalizing educational opportunities is important to promote intergenerational income mobility, although not sufficient. Nowadays, women in Brazil are more educated than men, but there exist social barriers to achieve equal payment for similar levels of schooling. Then, there is still room for gendered actions and policies related to improvements in labor market conditions to narrow the gender wage gap between men and women and between workers from richer and poorer families.

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Advances in Women’s Empowerment: Critical Insight from Asia, Africa and Latin America
Type: Book
ISBN: 978-1-83982-472-2

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Luis Beccaria and Fernando Groisman

Purpose: The paper analyzes the variability of labor incomes in Argentina from mid-1980s to 2005. The magnitude of income instability and its determinants are evaluated…

Abstract

Purpose: The paper analyzes the variability of labor incomes in Argentina from mid-1980s to 2005. The magnitude of income instability and its determinants are evaluated under different macroeconomic contexts. It also analyzes how income fluctuations have influenced income distribution. Finally, the income convergence hypothesis is explored.

Methodology/approach: Different quantitative procedures are employed to measure mobility from dynamic information coming from the regular household survey. Four periods are distinguished that are relatively homogeneous. Dynamic pseudo-panels are also considered.

Findings: The growth in occupational instability registered since the mid-1990s led to a high variability of incomes despite the macroeconomic stability enjoyed throughout the nineties. Moreover, the panorama of growing inequality in the distribution of monthly income (the usual measure employed in Argentina) is also appropriate to describe what happened with the changes in the distribution of more permanent incomes. Finally, long-term income mobility in Argentina is scarce, indicating that the income path does not converge to the general mean.

Research limitations/implications (if applicable): Data refer only to Greater Buenos Aires since microdata are not available for the other areas covered by survey for the entire period under analysis. However, results are reasonably representative of the whole urban areas of the country.

Originality/value of paper: This research identifies the relative importance of labor market and macroeconomic factors in explaining income mobility. Moreover, it is for the first time in Argentina that dynamic information coming from panel data and pseudo-panels are analyzed together.

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Inequality and Opportunity: Papers from the Second ECINEQ Society Meeting
Type: Book
ISBN: 978-1-84855-135-0

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Article

Aswini Kumar Mishra and Anil Kumar

The purpose of this paper is to examine income inequality and income mobility, which have been central to understanding India’s recent economic development.

Abstract

Purpose

The purpose of this paper is to examine income inequality and income mobility, which have been central to understanding India’s recent economic development.

Design/methodology/approach

This paper uses the first two waves of the India Human Development Survey data for the year 2004–2005 and 2011–2012 to analyze income inequality and income mobility using longitudinal data, and is the first to do so at a nationally representative level. In this research paper, we address three related research questions: How have been the patterns of income mobility in India? What are the trends, levels and sources of income inequality in India? and finally And What is the structure of household income mobility?

Findings

The paper examines the trends, levels, sources and factors of income inequality and income mobility in India between 2005 and 2012. The results further show the case for high persistence at the top of income distribution but lower persistence at the bottom.

Research limitations/implications

Because of the chosen research approach, the research results may lack spatial analysis. Therefore, researchers are encouraged to test the proposed propositions further.

Practical implications

The paper suggests that, in the end, the nature of longer-term well-being is crucial to designing policy interventions to effectively tackle inequality, and economic mobility can be seen as an avenue to long-term equality.

Social implications

This study can further be extended to look at polarization issues at the national and sub-national levels.

Originality/value

This paper shows the analytical framework of additive decomposition of income mobility out of two sources, namely mobility due to the transfer of income within given structure and mobility due to economic growth or contraction in rural and urban India.

Details

International Journal of Social Economics, vol. 45 no. 9
Type: Research Article
ISSN: 0306-8293

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Article

Wenkai Sun, Xianghong Wang and Chong-En Bai

– This paper aims to illustrate the trends of income growth and income inequality and examines the dynamics and determinants of income mobility in rural China from 2003 to 2006.

Abstract

Purpose

This paper aims to illustrate the trends of income growth and income inequality and examines the dynamics and determinants of income mobility in rural China from 2003 to 2006.

Design/methodology/approach

The authors decomposed the Gini coefficient by different sources and analyzed income mobility using the method of income transition matrix. The authors then estimated the effects of demographic variables, labor migration, and other household characteristics on income growth using a dynamic panel data model.

Findings

The study obtained important findings on income mobility and income inequality in rural China. First, annual income inequality in rural China was smoothed during this period after a decline from 2003, with the largest contribution from the income of migration work. Second, income mobility remained rather stable and relatively high, with higher mobility in the interior provinces than in the coastal provinces. Third, the income levels of the poor and the wealthy households converged during this period after controlling other factors. Fourth, income growth depends on in the households' demographic composition, their human capital accumulation, and their chances of getting migration jobs.

Originality/value

The sound econometric methods applied to the most current rural household survey data provide important contributions to the literature of income inequality and income mobility in China.

Details

China Agricultural Economic Review, vol. 6 no. 1
Type: Research Article
ISSN: 1756-137X

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Article

Yingwei Huang, Jun Li and Zheng Gu

The purpose of this paper is to investigate the long-term differences in household income and their causes in the people’s commune through a panel of micro-data.

Abstract

Purpose

The purpose of this paper is to investigate the long-term differences in household income and their causes in the people’s commune through a panel of micro-data.

Design/methodology/approach

The income mobility method (including static Gini mobility and dynamic income transition matrix) as well as the multinomial logit model) are employed in this paper.

Findings

Empirical results indicate that differences in household income were relatively low during the people’s commune period. In addition, both Gini mobility and income transition matrix analyses show that income mobility in the long term was faster than that in the short term, suggesting income mobility was beneficial for low-income earners in the long term, i.e., there was an pro-poorness. The major factor influencing household income was the structure of family population, not the quantity of labor input.

Originality/value

This paper is the first using income mobility method to study farmers’ income disparity and conducting factor decomposition on it in the people’s commune period. The micro-data on production team level applied in the paper is of high value, and the paper is helpful to understand the low efficiency of the people’s commune.

Details

China Agricultural Economic Review, vol. 8 no. 4
Type: Research Article
ISSN: 1756-137X

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Book part

Olga Cantó and David O. Ruiz

Recent evidence on the impact of the crisis on developed countries shows that changes in income inequality and poverty have been relatively small in spite of the…

Abstract

Recent evidence on the impact of the crisis on developed countries shows that changes in income inequality and poverty have been relatively small in spite of the macroeconomic heterogeneity of the recession across different economies. However, when evaluating individual perceptions linked to the crisis any changes in the chances to scale up or lose ground in the income ladder are also crucial. Our aim in this paper is to analyze to what extent the recession has had an impact on individual equivalent incomes and, in particular, on the prevalence of downward mobility in two developed countries where job losses have been large. We find that income losses have increased, particularly in Spain, and while age and education are key determinants of the probability of experiencing an income loss in both countries, the presence of children only increases the probability of an income loss in Spain.

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Measurement of Poverty, Deprivation, and Economic Mobility
Type: Book
ISBN: 978-1-78560-386-0

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Article

Young Back Choi

The purpose of this paper is to question the frequently heard claims of a negative relationship between inequality and intergenerational mobility (such as the “Great…

Abstract

Purpose

The purpose of this paper is to question the frequently heard claims of a negative relationship between inequality and intergenerational mobility (such as the “Great Gatsby Curve” by Alan Krueger) and to propose entrepreneurship as the neglected prime countervailing force against the putative advantages of the rich.

Design/methodology/approach

A critical examination of evidences marshalled to support the case for a negative relationship between inequality and mobility, in terms of the appropriateness of statistical inferences and the consistency between implications and observations. The paper adopts alternative approach of Austrian economic in emphasizing the role of entrepreneurship in generating mobility.

Findings

The putative negative relationship between inequality and mobility is not supported by evidence. The result is partly that egalitarians tend to skip close examination when they run into evidence that seems to support their preconception. It is also partly that the dominant tradition in economics, based on the model of efficient allocation of given resources, induces them to overlook entrepreneurship, the prime wealth creator and generator of mobility.

Research limitations/implications

The research outlines an argument that the rich do not have advantage in entrepreneurship because it depends not on the ownership of currently valued resources, but on the discovery and exploitation of profitable opportunities. This claim is made based on Kirznerian perspective and author’s own theory of inference and learning process. However, it would be nice to able to provide empirical evidence of this claim made in the paper.

Social implications

Many policies of redistribution, based on the belief that increase in inequality (as measured by Gini coefficient) signifies a diminution of intergenerational mobility, should be re-examined since the alleged negative relationship between inequality and intergenerational mobility turns out to be untrue. For greater intergenerational mobility, entrepreneurs should be encouraged, by allowing them to experiment freely.

Originality/value

Emphasizing the role of entrepreneurship in intergenerational mobility and the dealing with the question of whether or not the rich would have advantage in entrepreneurship is original to this paper.

Details

Journal of Entrepreneurship and Public Policy, vol. 4 no. 2
Type: Research Article
ISSN: 2045-2101

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John A. Bishop, Haiyong Liu and Juan Gabriel Rodríguez

There are conflicting views of the primary role of income inequality in economic development. Many expect that higher income shares at the top reflect substantial economic…

Abstract

There are conflicting views of the primary role of income inequality in economic development. Many expect that higher income shares at the top reflect substantial economic contributions while others think that these increases in top shares have not translated into higher economic growth. Recently, this debate has been reinvigorated by a new proposal: higher income inequality could hurt economic performance by decreasing future intergenerational mobility. We contribute to this debate by examining the relationship between intergenerational perceived job status mobility and past income inequality. We find a robust negative association of lagged income inequality with upward intergenerational job status mobility and a robust positive association of lagged income inequality with downward intergenerational job status mobility. In addition, we find that the quality of political institutions and religious fractionalization both contribute positively to job status mobility. Higher levels of past Gross Domestic Product (GDP) result in less upward job status mobility and more downward job status mobility.

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Veronika V. Eberharter

This paper analyzes the impact of family background characteristics and social exclusion features on the intergenerational transmission of educational attainment and income

Abstract

This paper analyzes the impact of family background characteristics and social exclusion features on the intergenerational transmission of educational attainment and income positions, and the relative poverty risk in Germany and the United States. These countries vary widely by welfare regime, family role patterns, and labor market settings. From these differences we predict higher intergenerational income elasticities in the United States and higher intergenerational educational elasticities in Germany. Using longitudinal data from the Cross-National Equivalent File (CNEF) 1980–2008, we find some empirical support for these hypotheses. In both countries, parental educational attainment stimulates intergenerational economic and social mobility, which accentuates the importance of promoting human capital accumulation.

Details

Inequality, Mobility and Segregation: Essays in Honor of Jacques Silber
Type: Book
ISBN: 978-1-78190-171-7

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