Upward Mobility Is … The Same As Ever?

Economic Mobility

Leonhardt summarizes a new study:

The odds of moving up — or down — the income ladder in the United States have not changed appreciably in the last 20 years, according to a large new academic study that contradicts politicians in both parties who have claimed that income mobility is falling. …

Raj Chetty, a professor of economics at Harvard and one of the authors, said in an interview that he and his colleagues still believed that a lack of mobility was a significant problem in the United States. Despite less discrimination of various kinds and a larger safety net than in previous decades, the odds of escaping the station of one’s birth are no higher today than they were decades ago.

Jared Bernstein yawns:

The conventional wisdom, as I’ve stressed in many places for many years, is that is has neither decreased nor increased.

In that regard, it’s surprising for this stability to be labeled a surprise, or, as the WSJ puts it, a finding that “muddles the debate” on mobility or inequality.  To be fair, researchers and politicians do sometimes lapse into claiming that the rate of mobility has decreased, and I know of one quality paper that finds a slight, though statistically significant, decline in the rate (here), but one paper doesn’t change the CW.  Most economists in this debate recognize that the rate of mobility has been relatively stable—nothing at all wrong, and a lot right, with a high quality new paper confirming this stable trend.  But it’s not new so I’m not sure why it’s news.

Heather Boushey’s analysis:

In terms of specific questions I’m left with after reading the paper, I’ll start with the tantalizing cliffhanger. The authors don’t yet have much income data for children born after 1986. As an interim measure, they look at college attendance rates. College attendance is correlated with later earnings, so this makes sense. But, of course, we don’t know yet what that relationship will look like for students who just graduated, especially for those starting their careers in the Great Recession.

Second, if Chetty and his co-authors are correct, the variation in intergenerational mobility is much greater within the United States than across time. In the United States, it matters more where you were born than when you were born. So, what are some places doing right (and what are others doing wrong)? What’s so special about Northern California or Salt Lake City?

Ezra passes along the map above (interactive version here), which shows that “geography is a massive predictor of future mobility.” J.D. Vance takes the debate in a different direction:

There’s a risk here of exaggerating the authors’ conclusions.  They didn’t find that opportunity for the poor is stable and robust, but that it’s stable and endangered.  For those who care about the American Dream, there’s much work to do.  There just isn’t more work to do now than there was a few decades ago.  That’s hardly consolation.

Still, if it doesn’t change the fact that upward mobility is something we need more of, it should change the conversation about why we don’t have it.  The story of many on the left is that America was humming along nicely until Reagan rigged the system for the rich.  Carter’s loss ended the hopes of the working class.  It was a convenient story, but now we know it’s basically false.