Earnings Mobility and Measurement Error : A Pseudo-Panel Approach

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 pan...

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Main Authors:	Antman, Francisca, McKenzie, David J.
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ABSOLUTE VALUE ASSET HOLDINGS AVERAGE INCOME CITIES CONDITIONAL CONVERGENCE CONSUMER PRICE INDEX DEVELOPING COUNTRIES DIFFERENCES IN INCOME DWELLING DWELLING UNITS DWELLINGS DYNAMIC PANEL EMPIRICAL LITERATURE FRAMEWORK GROWTH LITERATURE HOUSEHOLD DATA HOUSEHOLD HEAD HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLDS HOUSES HOUSING IMPACT OF SHOCKS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME FLUCTUATIONS INCOME GAP INCOME GROWTH INCOME INEQUALITY INCOMES INEQUALITY LABOR FORCE LABOR MARKET LIVING STANDARDS LOG INCOME MEAN INCOME MEASUREMENT ERROR MEASUREMENT ERRORS MOBILITY NATIONAL INCOME NEGATIVE SHOCKS NOISE OCCUPATIONS OLD AGE POLICY RESEARCH POSITIVE SHOCKS RURAL RURAL AREAS RURAL HOUSEHOLDS SOCIAL SECURITY SPEED TIME SERIES URBAN AREAS WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2005/10/6328585/earnings-mobility-measurement-error-pseudo-panel-approach http://hdl.handle.net/10986/8517

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recordtype	oai_dc
spelling	okr-10986-85172021-04-23T14:02:43Z Earnings Mobility and Measurement Error : A Pseudo-Panel Approach Antman, Francisca McKenzie, David J. ABSOLUTE VALUE ASSET HOLDINGS AVERAGE INCOME CITIES CONDITIONAL CONVERGENCE CONSUMER PRICE INDEX DEVELOPING COUNTRIES DIFFERENCES IN INCOME DWELLING DWELLING UNITS DWELLINGS DYNAMIC PANEL EMPIRICAL LITERATURE FRAMEWORK GROWTH LITERATURE HOUSEHOLD DATA HOUSEHOLD HEAD HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLDS HOUSES HOUSING IMPACT OF SHOCKS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME FLUCTUATIONS INCOME GAP INCOME GROWTH INCOME INEQUALITY INCOMES INEQUALITY LABOR FORCE LABOR MARKET LIVING STANDARDS LOG INCOME MEAN INCOME MEASUREMENT ERROR MEASUREMENT ERRORS MOBILITY NATIONAL INCOME NEGATIVE SHOCKS NOISE OCCUPATIONS OLD AGE POLICY RESEARCH POSITIVE SHOCKS RURAL RURAL AREAS RURAL HOUSEHOLDS SOCIAL SECURITY SPEED TIME SERIES URBAN AREAS WEALTH 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. 2012-06-20T15:13:55Z 2012-06-20T15:13:55Z 2005-10 http://documents.worldbank.org/curated/en/2005/10/6328585/earnings-mobility-measurement-error-pseudo-panel-approach http://hdl.handle.net/10986/8517 English Policy Research Working Paper; No. 3745 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABSOLUTE VALUE ASSET HOLDINGS AVERAGE INCOME CITIES CONDITIONAL CONVERGENCE CONSUMER PRICE INDEX DEVELOPING COUNTRIES DIFFERENCES IN INCOME DWELLING DWELLING UNITS DWELLINGS DYNAMIC PANEL EMPIRICAL LITERATURE FRAMEWORK GROWTH LITERATURE HOUSEHOLD DATA HOUSEHOLD HEAD HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLDS HOUSES HOUSING IMPACT OF SHOCKS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME FLUCTUATIONS INCOME GAP INCOME GROWTH INCOME INEQUALITY INCOMES INEQUALITY LABOR FORCE LABOR MARKET LIVING STANDARDS LOG INCOME MEAN INCOME MEASUREMENT ERROR MEASUREMENT ERRORS MOBILITY NATIONAL INCOME NEGATIVE SHOCKS NOISE OCCUPATIONS OLD AGE POLICY RESEARCH POSITIVE SHOCKS RURAL RURAL AREAS RURAL HOUSEHOLDS SOCIAL SECURITY SPEED TIME SERIES URBAN AREAS WEALTH
spellingShingle	ABSOLUTE VALUE ASSET HOLDINGS AVERAGE INCOME CITIES CONDITIONAL CONVERGENCE CONSUMER PRICE INDEX DEVELOPING COUNTRIES DIFFERENCES IN INCOME DWELLING DWELLING UNITS DWELLINGS DYNAMIC PANEL EMPIRICAL LITERATURE FRAMEWORK GROWTH LITERATURE HOUSEHOLD DATA HOUSEHOLD HEAD HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLDS HOUSES HOUSING IMPACT OF SHOCKS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME FLUCTUATIONS INCOME GAP INCOME GROWTH INCOME INEQUALITY INCOMES INEQUALITY LABOR FORCE LABOR MARKET LIVING STANDARDS LOG INCOME MEAN INCOME MEASUREMENT ERROR MEASUREMENT ERRORS MOBILITY NATIONAL INCOME NEGATIVE SHOCKS NOISE OCCUPATIONS OLD AGE POLICY RESEARCH POSITIVE SHOCKS RURAL RURAL AREAS RURAL HOUSEHOLDS SOCIAL SECURITY SPEED TIME SERIES URBAN AREAS WEALTH Antman, Francisca McKenzie, David J. Earnings Mobility and Measurement Error : A Pseudo-Panel Approach
geographic_facet	Latin America & Caribbean Mexico
relation	Policy Research Working Paper; No. 3745
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Antman, Francisca McKenzie, David J.
author_facet	Antman, Francisca McKenzie, David J.
author_sort	Antman, Francisca
title	Earnings Mobility and Measurement Error : A Pseudo-Panel Approach
title_short	Earnings Mobility and Measurement Error : A Pseudo-Panel Approach
title_full	Earnings Mobility and Measurement Error : A Pseudo-Panel Approach
title_fullStr	Earnings Mobility and Measurement Error : A Pseudo-Panel Approach
title_full_unstemmed	Earnings Mobility and Measurement Error : A Pseudo-Panel Approach
title_sort	earnings mobility and measurement error : a pseudo-panel approach
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/10/6328585/earnings-mobility-measurement-error-pseudo-panel-approach http://hdl.handle.net/10986/8517
_version_	1764407894787227648

Earnings Mobility and Measurement Error : A Pseudo-Panel Approach

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