Antman, FranciscaMcKenzie, David J.2012-06-202012-06-202005-10https://hdl.handle.net/10986/8517The degree of mobility in incomes is often seen as an important measure of the equality of opportunity in a society and of the flexibility and freedom of its labor market. But estimation of mobility using panel data is biased by the presence of measurement error and non-random attrition from the panel. This paper shows that dynamic pseudo-panel methods can be used to consistently estimate measures of absolute and conditional mobility in the presence of non-classical measurement errors. These methods are applied to data on earnings from a Mexican quarterly rotating panel. Absolute mobility in earnings is found to be very low in Mexico, suggesting that the high level of inequality found in the cross-section will persist over time. However, the paper finds conditional mobility to be high, so that households are able to recover quickly from earnings shocks. These findings suggest a role for policies which address underlying inequalities in earnings opportunities.CC BY 3.0 IGOABSOLUTE VALUEASSET HOLDINGSAVERAGE INCOMECITIESCONDITIONAL CONVERGENCECONSUMER PRICE INDEXDEVELOPING COUNTRIESDIFFERENCES IN INCOMEDWELLINGDWELLING UNITSDWELLINGSDYNAMIC PANELEMPIRICAL LITERATUREFRAMEWORKGROWTH LITERATUREHOUSEHOLD DATAHOUSEHOLD HEADHOUSEHOLD HEADSHOUSEHOLD INCOMEHOUSEHOLD MEMBERSHOUSEHOLDSHOUSESHOUSINGIMPACT OF SHOCKSINCOMEINCOME DIFFERENCESINCOME DISTRIBUTIONINCOME FLUCTUATIONSINCOME GAPINCOME GROWTHINCOME INEQUALITYINCOMESINEQUALITYLABOR FORCELABOR MARKETLIVING STANDARDSLOG INCOMEMEAN INCOMEMEASUREMENT ERRORMEASUREMENT ERRORSMOBILITYNATIONAL INCOMENEGATIVE SHOCKSNOISEOCCUPATIONSOLD AGEPOLICY RESEARCHPOSITIVE SHOCKSRURALRURAL AREASRURAL HOUSEHOLDSSOCIAL SECURITYSPEEDTIME SERIESURBAN AREASWEALTHWorld Bank10.1596/1813-9450-3745