Time is money: What drives income mobility?

This chapter investigates the key drivers of household income mobility from an individual perspective. It considers the impact of so-called “trigger events” – such as changes in labour market status, divorce or childbirth – on income mobility. The chapter shows that changes in labour market status are the main determinant of individual income trajectories, but that, in a number of countries, family-related changes can also play a very important role. In particular, women are more severely affected than men by income losses after a divorce. Net social transfers are a crucial factor to prevent downward mobility, while upward mobility results primarily from labour market dynamics.