Household Income Mobility in India, 1993-2011

Using nationally representative longitudinal survey, we examine income mobility among rural Indian households over 1993-2004 and 2004-2011. We use both absolute and relative measures of mobility. Absolute measures of mobility suggest higher income mobility during 2004-2011 compared to 1993-2004, and each social group witnessed higher income mobility over 2004-2011 compared to 1993-1994. Importantly, significant differentials in income mobility exist across the Hindu castes in both the time intervals: conditional on having similar rankings in base period income distribution, the Forward Hindu Caste households have the highest probability (lowest) of upward (downward) income mobility, followed by the Other Backward Caste, Scheduled Caste, and Scheduled Tribe households. Further controlling for district and household characteristics leads to reduction in the differentials in income mobility across social groups, however, significant differentials remain. We also examine income mobility among urban households over 2004-2011. Although social group differentials in income mobility also exist in urban areas, the differentials are lower in urban areas compared to rural areas. We also find that conditional on having similar rankings in base period national income distribution, urban households have higher probability to improve their rankings in national income distribution. We find similar patterns in social group differentials in mobility over 2004-2011 using the consumption expenditure as a measure of well-being