Stochastic indicators of income mobility

Income mobility is one of the indicators of social mobility. This study explains the methodology in estimating the stochastic indicators of income mobility in Canada using aggregate time series data. Assuming stationary finite Markov chain approximation of the mobility process, the probabilities of transition from one income stratum to another was estimated. The absolute minimum deviation criterion has been employed for the period 1946–72. This investigation suggests that, on an annual basis, there was low degree of upward income mobility in Canada.