The Generalized Gini index and the measurement of income mobility

Two new normative indices of mobility are proposed. The first one is a population weighted generalized Gini mobility index and will be higher, the higher the size of the transfer between two individuals and, for a given transfer, the higher the rank difference between the individuals between whom the transfer takes place. This index is also higher, the greater the rank gap between the individuals between whom a swap takes place. The second index is an income weighted generalized Gini mobility index. When a transfer takes place between two individuals this index will be higher, the greater the transfer. Similarly in the case of a swap between the incomes of two individuals, the index will be higher, the greater the gap between the incomes of the two individuals between whom the incomes are swapped. The empirical illustration is based on Israeli Census data.