Cross-National Differences in Income Mobility: Evidence from Canada, the United States, Great Britain and Germany

26 Pages Posted: 27 Apr 2009

Abstract

Using a standardized dataset, this paper compares the differences in income mobility among four countries - Canada, the United States, Great Britain and Germany - during the 1990s and early 2000s. The results suggest that, in general, there exist diverse levels of income mobility across the four countries. Although the precise magnitudes of the differences are sensitive to the measurement method used, incomes in Britain are by far the most mobile. Our findings also reveal country-specific driving forces that underlie income mobility. The stabilizing effects of government transfers are most pronounced in Canada. In Germany, it is the progressive tax system that offsets earnings variations and results in smaller changes in longitudinal incomes. Moreover, we also discover that demographic factors provided only limited explanation of differences in income mobility.

Suggested Citation

Chen, Wen-Hao, Cross-National Differences in Income Mobility: Evidence from Canada, the United States, Great Britain and Germany. Review of Income and Wealth, Vol. 55, Issue 1, pp. 75-100, March 2009, Available at SSRN: https://ssrn.com/abstract=1395460 or http://dx.doi.org/10.1111/j.1475-4991.2008.00307.x

Wen-Hao Chen (Contact Author)

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