Economic mobility is the ability of an individual, family or some other group to improve (or lower) their economic status—usually measured in income. Economic mobility is often measured by movement between income quintiles. Economic mobility may be considered a type of social mobility, which is often measured in change in income.
There are many different ideas in the literature as to what constitutes a good mathematical measure of mobility, each with their own advantages and drawbacks.
Mobility may be between generations ("inter-generational") or within a person's or group's lifetime ("intra-generational").
It may be "absolute" or "relative".
Inter-generational mobility compares a person's (or group's) income to that of her/his/their parents. Intra-generational mobility, in contrast, refers to movement up or down over the course of a working career. Absolute mobility involves widespread economic growth and answers the question "To what extent do families improve their incomes over a generation?” Relative mobility is specific to individuals or groups and occurs without relation to the economy as a whole. It answers the question, "how closely are the economic fortunes of children tied to that of their parents?" Relative mobility is a zero-sum game, absolute is not.
Exchange mobility is the mobility that results from a "reshuffling" of incomes among the economic agents, with no change in the income amounts. For example, in the case of two agents, a change in income distribution might be {1,2}->{2,1}. This is a case of pure exchange mobility, since they have simply exchanged incomes. More generally, for a set of incomes xi, any permutation of the xi will yield a pure exchange mobility. Measures of inequality (e.g. the Gini coefficient) will not change under pure exchange mobility.
Structural mobility is mobility that results from a change in the income distribution function without regard to the identity of the agents. For two agents, a change in income distribution might be {1,3}->{2,2}.
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EPFL2023
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