Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) LSE RSS Contact Us YouTube Twitter

Abstract:

DARP Paper
On the Non-Stationarity of German Income Mobility (and some observations on poverty dynamics)
Christian Schluter
April 1997
Paper No' DARP 030:
Full Paper (pdf)

Tags: intra-distributional mobility; markovian models; time-varying transition probabilities; poverty.

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.