Absolute intragenerational mobility in the United States, 1962–2014

Abstract

AbstractThis 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.