Abstract
Rank-based measures of intergenerational mobility are generally justified by their invariance to changes in inequality. However, I show that whenever the source of inequality is uncorrelated to parent ranks, such as in the cases of gender and birth order, increasing equality leads to a fall in rank mobility as measured by the rank correlation. I develop a method to ex-post quantify the importance of inequality for mobility measurement using cross-sectional income distributions and show that US income mobility could have fallen by as much as 24 percent since 1970 due to increased gender equality. Without specifying a policy objective of interest, it is therefore unclear which conclusions to draw from differences in rank-correlations across societies or from changes over time.
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Data Availability
Data for estimating income distributions are available from https://usa.ipums.org/usa (Ruggles et al. 2021). Code for reproducing empirical results are available from the following repository: https://github.com/MikkelGandil/papers/tree/master/rank_correlations.
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Acknowledgements
This research was carried out at University of Copenhagen and University of Oslo with support from the Danish Innovation Fund and the Danish Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd). The Norwegian Research Council supported this research under project no. 275906.
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Open access funding provided by University of Oslo (incl Oslo University Hospital). The Norwegian Research Council supported this research under project no. 275906.
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Gandil, M.H. Rank-correlations are not robust to differences in group inequality. J Econ Inequal 21, 201–217 (2023). https://doi.org/10.1007/s10888-022-09550-w
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DOI: https://doi.org/10.1007/s10888-022-09550-w
Keywords
- Economic inequality
- Gender inequality
- Intergenerational mobility
- Mobility measurement
- Rank-correlation
- Wealth inequality