Re:MIT economist aims to move the inequality discussion beyo...
by wtmcc on Sunday June 01, 2014 @08:45AM
(#7828965)
Probably the best citation is a remarkable, rigorous paper by Chetty et al (2014) that uses individual IRS returns [1].
To quote those authors: “We find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the ‘birth lottery’ – the parents to whom a child is born – are larger today than in the past.”
[1] http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
That's a tremendously strong statement that I've never seen any factual support for, only opinion pieces with cherry-picked data from 'think-tanks'.
Rigorous looks have found precisely the opposite, for instance, from the Boston Fed's 40-year retrospective[1]:
> A variety of measures indicate that U.S. family income mobility has decreased over the 1969–2006 time span, and especially since the 1980s. Most overall relative mobility measures fell, on net, with mobility significantly lower in the 1995–2005 period than in the 1977–1987 period. Origin-specific measures also declined, with families starting in the poorest quintile less likely to make far moves (to the middle or higher quintiles) during the 10 years from 1995 to 2005 than within the 1977–1987 period.
> Similarly, absolute quintile mobility declined overall and for poor families after 1981–1991 (when real post-government income growth began to slow). Thus, families have become increasingly less likely to change rank or move out of their (relative or absolute) decile or quintile of origin, and when they move, to move less far; this appears to be the case overall and for those who start rich or poor.
[1] - http://www.bostonfed.org/economic/wp/wp2011/wp1110.pdf