Publication:
Approximating Income Distribution Dynamics Using Aggregate Data

dc.contributor.authorKraay, Aart
dc.contributor.authorVan der Weide, Roy
dc.date.accessioned2017-07-18T22:33:25Z
dc.date.available2017-07-18T22:33:25Z
dc.date.issued2017-06
dc.description.abstractThis paper proposes a methodology to approximate individual income distribution dynamics using only time series data on aggregate moments of the income distribution. Under the assumption that individual incomes follow a lognormal autoregressive process, this paper shows that the evolution over time of the mean and standard deviation of log income across individuals provides sufficient information to place upper and lower bounds on the degree of mobility in the income distribution. The paper demonstrates that these bounds are reasonably informative, using the U.S. Panel Study of Income Dynamics where the panel structure of the data allows us to compare measures of mobility directly estimated from the micro data with approximations based only on aggregate data. Bounds on mobility are estimated for a large cross-section of countries, using data on aggregate moments of the income distribution available in the World Wealth and Income Database and the World Bank's PovcalNet database. The estimated bounds on mobility imply that conventional anonymous growth rates of the bottom 40 percent (top 10 percent) that do not account for mobility substantially understate (overstate) the expected growth performance of those initially in the bottom 40 percent (top 10 percent).en
dc.identifierhttp://documents.worldbank.org/curated/en/807641498574886507/Approximating-income-distribution-dynamics-using-aggregate-data
dc.identifier.urihttps://hdl.handle.net/10986/27626
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8123
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectINCOME DISTRIBUTION
dc.subjectINEQUALITY
dc.subjectMOBILITY
dc.subjectPOVERTY
dc.subjectBOTTOM 40 PERCENT
dc.titleApproximating Income Distribution Dynamics Using Aggregate Dataen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleApproximating Income Distribution Dynamics Using Aggregate Data
okr.date.disclosure2017-06-27
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/807641498574886507/Approximating-income-distribution-dynamics-using-aggregate-data
okr.identifier.doi10.1596/1813-9450-8123
okr.identifier.externaldocumentum090224b084d377d3_1_0
okr.identifier.internaldocumentum27678229
okr.identifier.reportWPS8123
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/807641498574886507/pdf/WPS8123.pdfen
okr.statistics.combined1421
okr.statistics.dr807641498574886507
okr.statistics.drstats1065
okr.topicMacroeconomics and Economic Growth::Economic Theory & Research
okr.topicPoverty Reduction::Inequality
okr.topicPoverty Reduction::Poverty Monitoring & Analysis
okr.unitMacroeconomics and Growth Team, Development Research Group
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