Abstract
This paper combines historical cross-sectional and longitudinal data in the United States to study the evolution of absolute intragenerational mobility over periods of four years. Absolute intragenerational mobility over such periods is procyclical and is largely confined within 45%–55%. We also find that absolute mobility decreases with income. Individuals and families occupying the lower ranks of the income distribution have a higher probability of increasing their income over short time periods than those occupying higher ranks. This also occurs during periods of increasing inequality. Our findings stem from the importance of the changes in the composition of income ranks. These changes are over and above mechanical labor market dynamics, such as entering and exiting the labor force, and life cycle effects. We offer a simplified model to mathematically describe these findings.
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The datasets used and/or analyzed during the current study are publicly available in the Panel Study of Income Dynamics (https://psidonline.isr.umich.edu/) and the World Inequality Database (https://wid.world/).
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Acknowledgements
I am grateful to the editor and two anonymous reviewers for very helpful comments. I also wish to thank Alex Adamou, François Bourguignon, Jonathan Goupille-Lebret, David Splinter and Daniel Waldenström for helpful comments and suggestions, along with seminar participants at City, University of London, Columbia University, Freie Universität Berlin, University of Haifa, Harvard University, Hebrew University of Jerusalem, the London School of Economics, the Norwegian University of Science and Technology, Université Paris 1 Panthéon-Sorbonne, and the Paris School of Economics, and with conference participants at the ASSA meeting, the Association Française de Science Economique congress, EEA-ESEM, and the Econometric Society European winter meeting.
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Berman, Y. Absolute intragenerational mobility in the United States, 1962–2014. J Econ Inequal 20, 587–609 (2022). https://doi.org/10.1007/s10888-022-09529-7
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DOI: https://doi.org/10.1007/s10888-022-09529-7