Earnings Mobility and Measurement Error: A Pseudo‐Panel Approach
By Francisca M. Antman, David J. McKenzie. Economic development and cultural change, 2005
163 citations recorded by the source corpus.
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. However, estimation of mobility using panel data is biased by the presence of measurement error and nonrandom attrition from the panel. This study shows that dynamic pseudo‐panel methods can be used to consistently estimate measures of absolute and conditional mobility when genuine panels are not available and in the presence of nonclassical 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 study finds conditional mobility to be high, so that households are able to recover quickly from earnings shocks. These findings suggest a role for policies that address underlying inequalities in earnings opportunities.
Subfields: Economics and Econometrics, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/8f44f4775c3396c3c5ec5494de3616fde7577835
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
- David J. McKenzie
- Christopher Woodruff
- Pablo A. Acosta
- R. H. Adams
- N. Fiala
- S. D. Mel
- Asli Demirgüç-Kunt
- Miriam Bruhn
In Sociology and Political Science
- Christopher Woodruff
- David J. McKenzie
- R. H. Adams
- Pablo A. Acosta
- Gordon H. Hanson
- Hillel Rapoport
- S. Franklin
- N. Fiala
Citations in the corpus
- Experimental Evidence on Returns to Capital and Access to Finance in Mexico (2008, background): “Antman and McKenzie (2007) report an attrition rate of 35 percent over five quarters among 25- to 49-year-old household heads with wage or self-employed earnings.”
- Poverty traps and nonlinear income dynamics with measurement error and individual heterogeneity (2005, unknown): “See Antman and McKenzie (2005b) for more discussion of this point.”