Illustrating Income Mobility: Two New Measures*

Abstract

Jenkins and Lambert (1997) demonstrated that a number of measures of poverty could be combined and compared using the "Three Is of Poverty" (TIP) curve; the ‘three Is’ being the incidence, intensity and inequality of poverty. This paper takes the insights from the TIP curve and applies them to income growth based measures of mobility, proposing a "Three Is of Mobility", or TIM, curve. Similar analysis is then applied to re-ranking measures of mobility to yield a re-ranking ratio (RRR) curve. Illustrations are provided using income data from random samples of New Zealand income taxpayers over the period 1998 to 2010. It is argued that both curves represent simple graphical devices that nevertheless conveniently illustrate the "Three Is" properties of income mobility.