Working Paper: NBER ID: w18618
Authors: Gulgun Bayazozturk; Richard V. Burkhauser; Kenneth A. Couch
Abstract: The cross-national intragenerational income mobility literature assumes within-country mobility is invariant over the period measured. We argue that a great social transformation--German reunification-- abruptly and permanently altered economic mobility. Using standard measures of mobility (with panel data for the western states of Germany and the U.S.) over the entire period 1984-2006, we find the conventional result that income mobility is greater in Germany. But when we cut the data into moving five-year windows and compare mobility before and after reunification, income mobility declines significantly over the years immediately following reunification in Germany but not in the U.S.
Keywords: Income Mobility; Germany; United States; Reunification; Economic Inequality
JEL Codes: J1; J6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income mobility in western states of Germany (1984-1988) (J62) | higher than U.S. income mobility (J62) |
| U.S. income mobility (1984-1988) (J62) | baseline for mobility levels (J62) |
| U.S. income mobility (J62) | stability or slight improvement in mobility (J62) |
| German reunification (F55) | decline in income mobility in Germany (J62) |
| German reunification (F55) | changes in income mobility (J62) |
| U.S. income mobility (1984-1988) (J62) | decline in income mobility (1992-1996) (J62) |