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THREAD. Do successive generations do better than their parents? Has the U.S. become a rigid “class society,” or is Horatio Alger’s vision of economic advancement through hard work still alive and well?
I look at the data.
My article for @mercatus: https://www.mercatus.org/bridge/commentary/america-upwardly-mobile-society
I look at the data.
My article for @mercatus: https://www.mercatus.org/bridge/commentary/america-upwardly-mobile-society
2/ I conclude that economic mobility is still a key part of the American story. But populists on the left and the right see stagnation and decline. They are off base. Here’s why.
3/ How “sticky” is income rank within the same family across generations? I find that about 36% of children raised in the bottom 20% remain there as adults, and about 39% of children raised in the top 20% are themselves in the top 20% when they are in their 40s.
4/ What to make of these findings? On the one hand, arguing that one-third of children raised in the bottom remain there when they reach their prime earning years makes America seem like a rigid class society.
5/ On the other hand, arguing that two-thirds of children raised in the bottom escape that position as adults makes America seem quite upwardly mobile.
6/ The same issue presents itself with stickiness at the top. Of the children born into the top quintile, 39% stay there. That sounds sticky. But what if, instead, I characterized the data as saying that well over half of the children raised at the top do not remain at the top?
7/ I have a hard time using these relative, or rank-based, mobility statistics to arrive at firm conclusions about the state of economic mobility.
8/ I am, of course, eager for more children raised in the bottom to rise to the top. But because relative mobility is rank-based, for every person who moves up the ladder, someone else has to move down.
9/ In other words, if you are cheering for more upward mobility, you are necessarily also cheering for downward mobility. I find it something of a struggle to cheer enthusiastically for downward mobility.
10/ Relative mobility is not the only kind of mobility, nor is it necessarily the most important. We can also look at rates of absolute mobility, which is a measure of how living standards themselves and not relative income rank change over time.
11/ It’s easy to decide how much absolute mobility we want in America: more! Positive absolute mobility corresponds directly with improving standards of living.
12/ And it’s easy to support increasing absolute mobility on moral grounds. Everyone can do better under this concept of mobility. Looking at mobility through this lens, no one has to do worse for someone else to do better.
13/ I find that around 73 percent of Americans in their 40s have higher incomes than did their parents. Among children raised in the bottom quintile, 86 percent have gone on to enjoy higher incomes than their parents.
14/ In other words, 86 percent of today’s 40-somethings who were raised in the bottom 20 percent have higher incomes than their parents did when the parents were in their 40s. Upward mobility from the bottom of the income distribution is what we should care about most.
15/ For adults who were raised in the second quintile, about 76% enjoy a higher income than their parents. This quintile represents many in the working class, a group that has received considerable attention from populists in both political parties, including the president.
16/ America is clearly an upwardly mobile nation. The common experience is for children to have higher incomes than their parents. This is particularly true of children raised in the bottom 20 percent and, really, for those raised outside the top 20 percent.
17/ Could there be more upward mobility in America? Yes. But if you have to pick between the American Dream of upward mobility being alive or dead, between America being a class society or not, the data strongly supports the description of America as an upwardly mobile society.
Fin/ America is not a class society, where little intergenerational progress takes place. The American Dream is not dead.
Check out my new book for my full argument. https://www.amazon.com/American-Dream-Not-Dead-Populism/dp/159947557X/ref=sr_1_1
Check out my new book for my full argument. https://www.amazon.com/American-Dream-Not-Dead-Populism/dp/159947557X/ref=sr_1_1
