Upward Mobility Has Not Declined

January 29, 2014

A new study finds that the odds of moving up the income ladder are the same today as they were 20 years ago, says the New York Times.

The findings contradict widespread claims that a person's chance for upward mobility is lower today than in the past. In December, President Obama made this claim, saying, "The problem is that alongside increased inequality, we've seen diminished levels of upward mobility in recent years."

The study examined 40 million tax records to come to the conclusion that mobility has remained steady. For example:

  • Eight percent of children born in the early 1980s to families in the bottom fifth of the income distribution made it to the top fifth for their age group today. For children born 10 years before that, the rate was nearly the same.
  • Ten years ago, 20 percent of children born in the middle income distribution found their way to the top. That figure is the same today.

The study also examined another report by researchers who had observed children born between 1952 and 1975. Combining those results indicates that intergenerational mobility rates have been steady for the last 50 years.

Absolute mobility -- the measure of a person's income compared to his parents' -- has also improved in recent years. Median family income is close to 12 percent higher today than it was in 1980, meaning that most adults have more disposable income than did their parents at the same age. The growth rate of that mobility has slowed, however, as economic growth has slowed.

Source: David Leonhardt, "Upward Mobility Has Not Declined, Study Says," New York Times, January 23, 2014. Raj Chetty et al., "Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States," National Bureau of Economic Research, January 2014.

 

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