Consolidating the Evidence on Income Mobility in the Western States of Germany and the U.S. from 1984-2006
NBER Working Paper No. 18618
The cross-national intragenerational income mobility literature assumes within-country mobility is invariant over the period measured. We argue that a great social transformation—German reunification— abruptly and permanently altered economic mobility. Using standard measures of mobility (with panel data for the western states of Germany and the U.S.) over the entire period 1984-2006, we find the conventional result that income mobility is greater in Germany. But when we cut the data into moving five-year windows and compare mobility before and after reunification, income mobility declines significantly over the years immediately following reunification in Germany but not in the U.S.
You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.