Approximating Income Distribution Dynamics Using Aggregate Data

Kraay, Aart ; Van der Weide, Roy

World Bank, Washington, DC

关键词: INCOME DISTRIBUTION;    INEQUALITY;    MOBILITY;    POVERTY;    BOTTOM 40 PERCENT;   

DOI  :  10.1596/1813-9450-8123
RP-ID  :  WPS8123

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper proposes a methodology toapproximate individual income distribution dynamics usingonly time series data on aggregate moments of the incomedistribution. Under the assumption that individual incomesfollow a lognormal autoregressive process, this paper showsthat the evolution over time of the mean and standarddeviation of log income across individuals providessufficient information to place upper and lower bounds onthe degree of mobility in the income distribution. The paperdemonstrates that these bounds are reasonably informative,using the U.S. Panel Study of Income Dynamics where thepanel structure of the data allows us to compare measures ofmobility directly estimated from the micro data withapproximations based only on aggregate data. Bounds onmobility are estimated for a large cross-section ofcountries, using data on aggregate moments of the incomedistribution available in the World Wealth and IncomeDatabase and the World Bank's PovcalNet database. Theestimated bounds on mobility imply that conventionalanonymous growth rates of the bottom 40 percent (top 10percent) that do not account for mobility substantiallyunderstate (overstate) the expected growth performance ofthose initially in the bottom 40 percent (top 10 percent).