Earnings Mobility and Measurement Error : A Pseudo-Panel Approach

Antman, Francisca ; McKenzie, David J.

World Bank, Washington, DC

关键词: ABSOLUTE VALUE;    ASSET HOLDINGS;    AVERAGE INCOME;    CITIES;    CONDITIONAL CONVERGENCE;   

DOI  :  10.1596/1813-9450-3745
RP-ID  :  WPS3745

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

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.