On the Non-Stationarity of German Income Mobility (and Some Observations on Poverty Dynamics)
49 Pages Posted: 21 Feb 2008
Date Written: April 1997
The intra-distributional mobility of German income dynamics is analysed using GSOEP. Transition probabilities are found to be time-varying. The tested models comprise various mixed Markov chains in discrete time and a non-stationary mover-stayer model is proposed. In order to explain the observed mobility profiles, we concentrate on one important income class - the poor - instead of the entire transition matrix. Various poverty duration models accommodating unobserved population heterogeneity and duration dependence are examined.
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