Working Paper: NBER ID: w29796
Authors: Debraj Ray; Garance Genicot
Abstract: We conceptualize and measure upward mobility over income or wealth. At the core of our exercise is the Growth Progressivity Axiom: transfers of instantaneous growth rates from relatively rich to poor individuals increases upward mobility. This axiom, along with mild auxiliary restrictions, identifies an “upward mobility kernel" with a single free parameter, in which mobility is linear in individual growth rates, with geometrically declining weights on baseline incomes. We extend this kernel to trajectories over intervals. The analysis delivers an upward mobility index that does not rely on panel data. That significantly expands our analytical scope to data-poor settings.
Keywords: upward mobility; economic growth; inequality
JEL Codes: D63; I32; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| transfers of instantaneous growth rates from relatively rich individuals to poorer ones (F16) | increase upward mobility (J62) |
| upward mobility is enhanced when poorer individuals experience higher growth rates (J62) | increase upward mobility (J62) |
| upward mobility is additive over time (J62) | increase upward mobility (J62) |