1. Consumption Mobility in the US Comments L. Osberg 18/10/02 Levy Institute Mobility Conference

2. Issues Raised What is relationship of mobility and inequality? Income of Consumption – which is better indicator of well-being? Can high mobility “offset” inequality?

3. Period T 1 2 1 2 n Person [Y it ] -inequality at t - dispersion in column vector - mobility - dispersion along row Income it

5. [Income it ] – [Consumption it ] = [Savings it ]

6. Hypotheses about Well-Being? subject to [Y i0,Y i1 …Y it ] BUT – is there – no capital market? C it  Y it U t OR – Perfect capital market and complete consumption smoothing? OR – Correlation of access to credit and current income levels

7. In Principle - Income inequality, consumption inequality and wealth inequality are inextricably linked In Practice -Measurement error in Y it, C it -Equivalency of incomes -Imputation and smoothing?

8. Pitfalls of Equivalency - vary as household size fluctuates Trend in can easily dominate

9. Purely Demographic Mobility t0t0 t1t1 Y$Y$ Y*Y* Y$Y$ Y*Y* A20 28.28 B20 28.28 C2028.2820 D 28.2820 E 34.642028.28 F2034.642028.28 G2034.6420 Average28.6424.14