6 ms·

America is no less socially mobile than it was a generation ago

44 points by hansy 13y ago

daniel-cussen 13y ago
If you've read past your limit and want to read this article anyway, delete your cookies.
- w1ntermute 13y ago
  Or open it in porn mode.
spikels 13y ago
Paper this article is based on: http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
lostcolony 13y ago
"Most likely...The correlation between vast wealth accruing to a tiny elite and the ability of people to move between the rest of the rungs of the income ladder may be small—at least for now." And there's the crux of the matter. Even if that correlation remains small, the top rung of that ladder is so far out of reach of everyone else, -and- incorporates an insanely disproportionate amount of money, power, and influence, that it will likely remain forever out of reach, while allowing for policies that markedly worsen the lives of those on lower rungs.
- kudos200 13y ago
  What proportion of the richest 1% (or 0.1%, or the top 1000 richest people) do you think came from families that were already in the top 1%? How do you define "out of reach"?
  - kudos200 13y ago
    Well, I got curious and found an answer: "In 1982, 60 percent of the people on the Forbes 400 list of wealthiest Americans came from wealthy families, compared with 32 percent in 2011." http://www.gsb.stanford.edu/news/research/joshua-rauh-what-forbes-400-list-says-about-american-wealth http://www.gsb.stanford.edu/news/research/joshua-rauh-what-f...
    - lostcolony 13y ago
      Which speaks nothing of policy changes today, and what effect it will have on the future. Nor what disruption will come about to ensure that that trend continues (we are given no data points in that post other than those two, and we had both the PC revolution and the internet in between 1982 and 2011 to massively shake up entire industries). More to the point, it speaks nothing on how conditions for those not among the elite have changed in that time, and how they will change over time.
    - testrun 13y ago
      Which means that mobility increased.
  - WalterBright 13y ago
    85% of American millionaires are self-made. Source: "The Millionaire Next Door"
    - colomon 13y ago
      But probably mostly not from the bottom quintile, which means this doesn't show up much in income mobility discussions.
jandrewrogers 13y ago
One thing to be aware of is that the range of incomes in many countries is much more compact than the US. If you define social mobility by the ability to move from the bottom segment to the top, it requires a much smaller change in income in most industrialized countries than in the US. For example, for the average person in Denmark to go from the bottom 10% to the top 10% of income requires earning a mere $40k more income. In the US, you would have to earn $90k more income. Consequently, it takes considerably more effort in the US to increase one's income in the US to the point where it would count as "social mobility" than in many countries even though you would be much better off in the lesser quintiles in absolute terms. In short, there are many countries where moving from $20k to $40k is considered "socially mobile" but also others where moving from $20k to $60k income is not because the top bracket is $80k. Most people would probably prefer to live in the latter country. It may be a little harder to reach the $80k than $40k to meet the definition of "socially mobile", but in absolute terms they are far better off with $60k of income regardless of the definition of social mobility.
- DerpDerpDerp 13y ago
  > in absolute terms they are far better off with $60k of income regardless of the definition of social mobility. I'm not sure this is true, if the cost of living (or luxuries) is different between the two countries.
  - jandrewrogers 13y ago
    Actually, the studies adjust the incomes for purchasing power parity, so it is not just nominal income. Costs of living and similar are built into the relative income quintiles and deciles when comparing between countries. The US also has a wider income range because of the enormous differences in cost of living within the country itself, in large part due to its size, which skews the result. The top quintile in one region of the US may be the middle quintile in another.
    - 001sky 13y ago
      Costs of living and similar are built into the relative income quintiles One way to break a correlation that uses an inflation index is to look at or carve out asset inflation. Once you correct for asset inflation (which is NPV'd income), only then will you have properly adjusted income measures.
scarmig 13y ago
Big takeaway: the USA is about as socially mobile as it was a generation ago. But that's only because the USA has never been as socially mobile as it imagines itself: some or most European countries have exceeded it in mobility for a long period of time.
djillionsmix 13y ago
"A generation ago" was gen x, which isn't the group that anyone thought was economically mobile. If they're not going to include the boomers this is sort of a stupid waste of time.
known 13y ago
https://en.m.wikipedia.org/wiki/Peter_principle https://en.m.wikipedia.org/wiki/Peter_principle
secretasiandan 13y ago
From the paper: For example, if one defines mobility based on relative positions in the income distribution – e.g., a child’s prospects of rising from the bottom to the top quintile – then intergenerational mobility has remained unchanged in recent decades. If instead one defines mobility based on the probability that a child from a low-income family (e.g., the bottom 20%) reaches a fixed upper income threshold (e.g., $100,000), then mobility has increased because of the increase in inequality. However, the increase in inequality has also magnified the difference in expected incomes between children born to low (e.g., bottom-quintile) vs. high (top-quintile) income families. In this sense, mobility has fallen because a child’s income depends more heavily on her parents’ position in the income distribution today than in the past.

44 points by hansy 13y ago

daniel-cussen 13y ago

If you've read past your limit and want to read this article anyway, delete your cookies.

w1ntermute 13y ago
Or open it in porn mode.

spikels 13y ago

Paper this article is based on: http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf

lostcolony 13y ago

"Most likely...The correlation between vast wealth accruing to a tiny elite and the ability of people to move between the rest of the rungs of the income ladder may be small—at least for now." And there's the crux of the matter. Even if that correlation remains small, the top rung of that ladder is so far out of reach of everyone else, -and- incorporates an insanely disproportionate amount of money, power, and influence, that it will likely remain forever out of reach, while allowing for policies that markedly worsen the lives of those on lower rungs.

kudos200 13y ago
What proportion of the richest 1% (or 0.1%, or the top 1000 richest people) do you think came from families that were already in the top 1%? How do you define "out of reach"?
- kudos200 13y ago
  Well, I got curious and found an answer: "In 1982, 60 percent of the people on the Forbes 400 list of wealthiest Americans came from wealthy families, compared with 32 percent in 2011." http://www.gsb.stanford.edu/news/research/joshua-rauh-what-forbes-400-list-says-about-american-wealth http://www.gsb.stanford.edu/news/research/joshua-rauh-what-f...
  - lostcolony 13y ago
    Which speaks nothing of policy changes today, and what effect it will have on the future. Nor what disruption will come about to ensure that that trend continues (we are given no data points in that post other than those two, and we had both the PC revolution and the internet in between 1982 and 2011 to massively shake up entire industries). More to the point, it speaks nothing on how conditions for those not among the elite have changed in that time, and how they will change over time.
  - testrun 13y ago
    Which means that mobility increased.
- WalterBright 13y ago
  85% of American millionaires are self-made. Source: "The Millionaire Next Door"
  - colomon 13y ago
    But probably mostly not from the bottom quintile, which means this doesn't show up much in income mobility discussions.

jandrewrogers 13y ago

One thing to be aware of is that the range of incomes in many countries is much more compact than the US. If you define social mobility by the ability to move from the bottom segment to the top, it requires a much smaller change in income in most industrialized countries than in the US. For example, for the average person in Denmark to go from the bottom 10% to the top 10% of income requires earning a mere $40k more income. In the US, you would have to earn $90k more income. Consequently, it takes considerably more effort in the US to increase one's income in the US to the point where it would count as "social mobility" than in many countries even though you would be much better off in the lesser quintiles in absolute terms. In short, there are many countries where moving from $20k to $40k is considered "socially mobile" but also others where moving from $20k to $60k income is not because the top bracket is $80k. Most people would probably prefer to live in the latter country. It may be a little harder to reach the $80k than $40k to meet the definition of "socially mobile", but in absolute terms they are far better off with $60k of income regardless of the definition of social mobility.

DerpDerpDerp 13y ago
> in absolute terms they are far better off with $60k of income regardless of the definition of social mobility. I'm not sure this is true, if the cost of living (or luxuries) is different between the two countries.
- jandrewrogers 13y ago
  Actually, the studies adjust the incomes for purchasing power parity, so it is not just nominal income. Costs of living and similar are built into the relative income quintiles and deciles when comparing between countries. The US also has a wider income range because of the enormous differences in cost of living within the country itself, in large part due to its size, which skews the result. The top quintile in one region of the US may be the middle quintile in another.
  - 001sky 13y ago
    Costs of living and similar are built into the relative income quintiles One way to break a correlation that uses an inflation index is to look at or carve out asset inflation. Once you correct for asset inflation (which is NPV'd income), only then will you have properly adjusted income measures.

scarmig 13y ago

Big takeaway: the USA is about as socially mobile as it was a generation ago. But that's only because the USA has never been as socially mobile as it imagines itself: some or most European countries have exceeded it in mobility for a long period of time.

djillionsmix 13y ago

"A generation ago" was gen x, which isn't the group that anyone thought was economically mobile. If they're not going to include the boomers this is sort of a stupid waste of time.

known 13y ago

https://en.m.wikipedia.org/wiki/Peter_principle https://en.m.wikipedia.org/wiki/Peter_principle

secretasiandan 13y ago

From the paper: For example, if one defines mobility based on relative positions in the income distribution – e.g., a child’s prospects of rising from the bottom to the top quintile – then intergenerational mobility has remained unchanged in recent decades. If instead one defines mobility based on the probability that a child from a low-income family (e.g., the bottom 20%) reaches a fixed upper income threshold (e.g., $100,000), then mobility has increased because of the increase in inequality. However, the increase in inequality has also magnified the difference in expected incomes between children born to low (e.g., bottom-quintile) vs. high (top-quintile) income families. In this sense, mobility has fallen because a child’s income depends more heavily on her parents’ position in the income distribution today than in the past.