This paper presents a framework for the evaluation and measurement of “reversal” and “origin independence” as separate aspects of economic mobility. We show that evaluation depends on aversion to multi-period inequality, aversion to inter-temporal fluctuations, and aversion to future risk. We construct “extended Atkinson indices” that allow us to quantify the relative impact of reversal and origin independence on welfare. We apply our approach to the comparison of income mobility in Germany and in the U.S.. When aversion to inequality is the only consideration, the U.S. gains more from mobility than Germany. This reflects similar gains from reversal in the two countries but greater gains in the U.S. from origin independence. The introduction of aversion to intertemporal fluctuations and aversion to future risk makes the impact of mobility in the two countries more similar.

We analyze the variance of log earnings within labor force cohorts of U.S. males with particular attention to the influence of labor force growth rates. Estimates with data from the 1968-79 current population surveys reveal increases in earnings inequality within labor force cohorts even after we control for the level of education, experience, and unemployment. A model of human capital investment is used to analyze differences among cohorts in the life-cycle profile of the variance of log earnings. It is shown that a pattern of sharply increasing and then declining labor force growth rates will tend to raise the return on human capital investment and thereby increase the variance of postschooling investment and log earnings early in the life cycle. This positive effect on relative earnings inequality should decline with experience and possibly become negative. Because of the post-World War II baby boom and baby bust, recent labor force entrants have faced just such a pattern of actual and projected labor force growth rates during their work life. An extended model is tested and generally confirmed using estimates and forecasts of labor force growth rates for the period 1920-2000.

We analyze the variance of log earnings within labor force cohorts of U.S. males with particular attention to the influence of labor force growth rates. Estimates with data from the 1968-79 current population surveys reveal increases in earnings inequality within labor force cohorts even after we control for the level of education, experience, and unemployment. A model of human capital investment is used to analyze differences among cohorts in the life-cycle profile of the variance of log earnings. It is shown that a pattern of sharply increasing and then declining labor force growth rates will tend to raise the return on human capital investment and thereby increase the variance of postschooling investment and log earnings early in the life cycle. This positive effect on relative earnings inequality should decline with experience and possibly become negative. Because of the post-World War II baby boom and baby bust, recent labor force entrants have faced just such a pattern of actual and projected labor force growth rates during their work life. An extended model is tested and generally confirmed using estimates and forecasts of labor force growth rates for the period 1920-2000.

This article provides evidence on changes in short‐term job instability and insecurity using the Survey of Income and Program Participation. Monthly measures from this data set are contrasted with annual measures from the Survey of Income and Program Participation and the Panel Study of Income Dynamics. Neither data set shows an increase in job turnover during the 1980s and 1990s. We also examine indicators of increased insecurity. These include the probability that a job ends involuntarily, is followed by a spell of nonemployment, or that the subsequent job has lower wages. These indicators of insecurity also show no upward trend.