Pages

 

Income Immobility In The U.S.A.

0 comments
Compared to other advanced industrial economies, wealth and income in the United States is distributed very unevenly. Mobility is low as well. In countering illusions and right-wing lies on the latter point, I have usually cited Gottschalk and Danziger (1997). They use data from the Panel Study of Income Dynamics (PSID). I need to update my understanding to reflect Hertz (2006), who also uses the PSID. I could also look at some other articles listed in the references to this post.

Both Gottschalk and Danziger (1997) and Hertz (2006) report a variety of analyses, investigating how robust their results are and the impact of various variables (e.g., race, education) on their results. I think Table 1 provides a useful summary of a central result from Gottschalk and Danziger. They have data on the income quintiles of the families of 1,909 persons in 1968 and 1991. They find that over approximately a quarter century, about two thirds or more of these people end up in families within one quintile of the families within which they start.

Table 1: Two-Thirds End Up In Families Within One Quintile Of Starting Family
1968
Quintiles
1991
Quintiles
1st
Quintile
2nd
Quintile
3rd
Quintile
4th
Quintile
5th
Quintile
1st Quintile46.9%25.1%17.7%9.0%1.3%
2nd Quintile24.224.822.319.19.7
3rd Quintile10.820.520.527.021.2
4th Quintile10.416.427.020.425.9
5th Quintile7.513.013.724.241.6

References
  • Bowles, Samuel and Herbert Gintis (2002). "The Inheritance of Inequality", Journal of Economic Perspectives, V. 16, N. 3: 3-30.
  • Gottschalk, Peter and Sheldon Danziger (1997). "Family Income Mobility - How Much Is There and Has It Changed?", (Draft?) (Dec)
  • Hertz, Tom (2006). "Understanding Mobility in America", American University for the Center for American Progress (26 Apr)
  • Mazumder, Bhashkar (2005). "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data", Review of Economics and Statistics, V. 87, N. 2: 235-255

0 comments:

Post a Comment

  • Greenspan's Cult of Personality... Review topics and articles of economics: Alan Greenspan was a legend in his time and there was no shortage of praise for him back then. For example, who can forget Bob Woodow's 2000 book Maestro: Greenspan's...
  • Yes Tyler, Low Interest Rates Matte... Tyler Cowen is wondering whether the Fed's low interest rates in the early-to-mid 2000s really were that important to the credit and housing boom of the early-to-mid...
  • The Eurozone Crisis: Deja Vu... Review topics and articles of economics: Randal Forsyth sees similarities between the current unfolding of the Eurozone crisis and that of the U.S. financial crisis a few years back:Just as the problem on this...
  • Charles Plosser and the Burden of F... The Economist's Free Exchange blog is shocked to hear this from Federal Reserve Bank of Philadelphia President Charles Plosser:"Since expectations play an important role...
  • Arnold Kling and Expected Inflation... Review topics and articles of economics: What do we know about expected inflation? According to Arnold Kling not much if we look to financial markets:I'm also not convinced that we can read expected inflation...
  • A Paper on Stabilizing Nominal Spen... Given the recent discussion on stabilizing nominal spending as a policy goal I found this article by Evan F. Koenig of the Dallas Fed to be interesting: The article...
  • Why The Low Interest Rates Mattered... Review topics and articles of economics: This is the second of two posts detailing why the Fed's low interest rate policies in the early-to-mid 2000s was one of the more important contributors to the credit and...
  • Why The Low Interest Rates Mattered... This is the first of a two-part follow up to my previous post, where I argued that the Fed's low interest rate policy was a key contributor to the credit and housing...
  • The Stance of Monetary Policy Via t... Review topics and articles of economics: There has been some interesting conversations on the stance of monetary policy in the past few days between Arnold Kling, Scott Sumner, and Josh Hendrickson. Part of...
  • Scott Sumner's New Best Friend:... Joseph Gagnon is calling for $6 trillion more in global monetary easing. This should not be too hard to implement since the Fed is a monetary superpower.Update: The...
 
Review topics and articles of economics © 2011 Income Immobility In The U.S.A.