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Summary Measures of Equalising Income Mobility Based on ‘Three Is of Mobility’ Curves

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  • Creedy, John
  • Gemmell, Norman

Abstract

This paper extends the ‘Three Is of Mobility (TIM) Curve’ framework, developed by Creedy and Gemmell (2019) to produce summary measures of equalising mobility between two periods, based on areas within the diagram. Two concepts of equalising mobility are considered. The first involves equalisation of incomes in the second period, achieved by a compression of incomes and no re-ranking. The second concept involves maximum redistribution in terms of the inequality of incomes measured over the two periods combined. This involves differential income growth and maximum re-ranking, whereby second period incomes are ‘swapped’: the richest person becomes the poorest, and so on. The measures are illustrated using a large sample of taxpayers’ incomes in New Zealand.

Suggested Citation

  • Creedy, John & Gemmell, Norman, 2022. "Summary Measures of Equalising Income Mobility Based on ‘Three Is of Mobility’ Curves," Working Paper Series 22008, Victoria University of Wellington, Chair in Public Finance.
    • Handle: RePEc:vuw:vuwcpf:22008
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/22008
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    References listed on IDEAS

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    1. John Creedy & Norman Gemmell, 2022. "Illustrating Income Mobility and Poverty Persistence," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(2), pages 309-323, June.
    2. Van Kerm, Philippe, 2009. "Income mobility profiles," Economics Letters, Elsevier, vol. 102(2), pages 93-95, February.
    3. Stephen P. Jenkins & Philippe Van Kerm, 2016. "Assessing Individual Income Growth," Economica, London School of Economics and Political Science, vol. 83(332), pages 679-703, October.
    4. John Creedy & Norman Gemmell, 2018. "Income Dynamics, Pro‐Poor Mobility and Poverty Persistence Curves," The Economic Record, The Economic Society of Australia, vol. 94(306), pages 316-328, September.
    5. John Creedy & Norman Gemmell, 2019. "Illustrating income mobility: new measures," Oxford Economic Papers, Oxford University Press, vol. 71(3), pages 733-755.
    6. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-327, July.
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