Research on economic growth and inequality inevitably raise issues concerning economic mobility because the relationship between long-run inequality and short-run inequality is mediated by income mobility; for a given level of short-run inequality greater mobility implies lower long-run inequality. Yet empirical measures of both inequality and mobility are biased upward due to measurement error in income andexpenditure data collected from household surveys. This paper presents a straightforward method to remove this bias using instrumental variable estimates. The method is applied to panel data from Vietnam. The results imply that at least 15%, and perhaps as much as 42%, of measured mobility is upward bias due to measurement error. The results also suggest that measurement error accounts for at least 12% of measured inequality.