The paper presents a decomposition of income mobility indices into two basic sources: mobility induced by a change of the income distribution shape, and mobility induced by a reordering of individuals in the income pecking order. The decomposition procedure, based on counterfactual distributions, results in a decomposition that is applicable to a broad class of mobility measures. Application to income ‘movement’ indices with data for Belgium, Western Germany and the USA indicates that reranking has been the major force behind income mobility.

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We examine the effect of income inequality on individuals' self-rated health status in a pooled sample of 11 countries, using longitudinal data from the European Community Household Panel survey. Taking advantage of the longitudinal and cross-national nature of our data, and carefully modeling the self-reported health information, we avoid several of the pitfalls suffered by earlier studies on this topic. We calculate income inequality indices measured at two standard levels of geography (NUTS-0 and NUTS-1) and find consistent evidence that income inequality is negatively related to self-rated health status in the European Union for both men and women, particularly when measured at national level. However, despite its statistical significance, the magnitude of the impact of inequality on health is very small.