On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective

The paper employs a rank-dependent formulation of the social welfare function with time-separable utilities to evaluate the economic consequences of income mobility from an ex-ante perspective. The resultant class of measures can be decomposed not only in terms of structural and exchange mobility but also in terms of vertical and horizontal mobility, thereby encompassing two of the main approaches in the literature. We illustrate our measurement framework by comparing mobility in the USA and Germany using data from the Cross-National Equivalent File 1980-2005. We find that the pattern of income mobility in the USA was both less pro-poor and more horizontally inequitable than in Germany, but that the latter did not translate into higher levels of exchange mobility given higher levels of absolute inequality and the vertical stance of the growth process.

Devolution & Entrenched Household Poverty: Is Scotland less mobile?

The Scottish National Party led Scottish Government has identified household poverty as a key focus for its anti-poverty strategy. The government’s ‘Solidarity Target’ seeks to both increase wealth and increase the share of total income gained by these three deciles. The ability to demonstrate the advantages of policy divergence within Scotland, relative to the other parts of the United Kingdom, is central to the Government’s aim of gaining support for increased powers for the devolved government. This paper seeks to provide evidence on one aspect of the government’s anti- poverty strategy; the degree to which Scotland differs from the rest of the UK over levels of entrenched poverty. The paper demonstrates that not only does Scotland have greater entrenched poverty but that the changes in mobility since the 1990s have impacted on Scotland to a lesser degree than the rest of the UK.

Income stratification and the measurement of interdistributional inequality between multiple groups

This paper proposes a new class of stratification indices that measure interdistributional inequality between multiple groups. The class is based on a conceptualisation of stratification as a process that results in a hierarchical ordering of groups and therefore seeks to capture not only the extent to which groups form well-defined strata in the income distribution but also the scale of the resultant differences in income standards between them, where these two factors play the same role as identification and alienation respectively in the measurement of polarisation. The properties of the class as a whole are investigated as well as those of selected members of it: zeroth and first power indices may be interpreted as measuring the overall incidence and depth of stratification respectively, while higher power indices members are directly sensitive to the severity of stratification between groups. An illustrative application provides an empirical analysis of global income stratification by regions in 1993.