Documenting decline in U.S. economic mobility

Source: Lawrence F. Katz, Alan B. Krueger, Science, April 24, 2017

Economists and other social scientists have long studied intergenerational income mobility, but consistent data linking adult incomes of children and their parents at similar ages over many generations have been unavailable, which thwarted attempts to study long-term trends. Chetty et al.’s study in this issue of Science is therefore a tour de force for producing historically comparable estimates of absolute income mobility—the fraction of individuals in a birth cohort who earn, at age 30, more than their parents did at roughly the same age—over the post–World War II period. Their striking conclusion is that there has been a large decline in the rate of upward mobility across successive U.S. birth cohorts, from 92% of children born in 1940 earning more than their parents to only half of children born in 1984. Although Chetty et al. find that the slowdown in Gross Domestic Product growth has played a role, they conclude that faster economic growth is insufficient to restore mobility to its immediate postwar level in light of increased income inequality—a critical insight for policy and research…..