Comparing Income Mobility in Poverty, Affluence and Middle Class Positions: Persistence in Poverty and the Longitudinal Dynamics of Income Distributions in PSID and SILC Data

Louis Chauvel, Université de Luxembourg
Anne Hartung, University of Luxembourg

In line with the recent studies, we compare short term income mobility (volatility) at different levels of the income distribution, and over time and space: Are the poor/rich particularly mobile? How has this changed over time? Are there cross-country differences in mobility patterns? Investigating changes in quantile ranking along the income scale, we test the dissymmetry hypothesis (mobility is different for the poor/rich) with the PSID 1970-2007 and the EU-SILC. Our empirical contribution is the European-American comparison as such studies are rare. We show that mobility in the US is the highest among the poorest, followed by the top group but is the lowest in the middle income classes. The comparison with Europe shows moreover that mobility patterns are diverse in Europe: Nordic countries and the Netherlands are characterized by lower income mobility specifically at the bottom whereas the UK and Portugal show strong instability of the poor.