Income Mobility and Welfare is popular PDF and ePub book, written by Mr.Tom Krebs in 2013-01-28, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Income Mobility and Welfare can be Read Online from any device for your convenience.
Income Mobility and Welfare Book PDF Summary
This paper develops a framework for the quantitative analysis of individual income dynamics, mobility and welfare. Individual income is assumed to follow a stochastic process with two (unobserved) components, an i.i.d. component representing measurement error or transitory income shocks and an AR(1) component representing persistent changes in income. We use a tractable consumption-saving model with labor income risk and incomplete markets to relate income dynamics to consumption and welfare, and derive analytical expressions for income mobility and welfare as a function of the various parameters of the underlying income process. The empirical application of our framework using data on individual incomes from Mexico provides striking results. Much of measured income mobility is driven by measurement error or transitory income shocks and therefore (almost) welfare-neutral. A smaller part of measured income mobility is due to either welfare-reducing income risk or welfare-enhancing catching-up of low-income individuals with high-income individuals, both of which have economically significant effects on social welfare. Decomposing mobility into its fundamental components is thus seen to be crucial from the standpoint of welfare evaluation.
Detail Book of Income Mobility and Welfare PDF
- Author : Mr.Tom Krebs
- Release : 28 January 2013
- Publisher : International Monetary Fund
- ISBN : 9781475567564
- Genre : Business & Economics
- Total Page : 28 pages
- Language : English
- PDF File Size : 21,6 Mb
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