Working Paper: CEPR ID: DP17051
Authors: Garance Genicot; Debraj Ray
Abstract: We develop a measure of upward mobility that distills central features of the relative and absolute approaches to measuring mobility. The former is embodied in the Growth Progressivity axiom: transfers of instantaneous growth rates from relatively rich to poor individuals increases upward mobility. The latter is embodied in the Growth Alignment axiom: mobility increases with higher growth for all individuals. These axioms, along with standard auxiliary restrictions, identify a simple one-parameter family of upward mobility measures, linear in individual growth rates and exhibiting geometrically declining weights on baseline incomes. A serendipitous implication of our measure is that it does not rely on panel data, which greatly expands our analytical scope to data-poor settings.
Keywords: income mobility; upward mobility; pro-poor growth
JEL Codes: I32; D63; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Rich Growth Rate (O40) | Upward Mobility (J62) |
| Higher Growth for All (O49) | Increased Upward Mobility (J62) |