Cure Income Inequality: Income Mobility! Not So Fast!

Income MobilityAgainst a rising chorus of concern about increasing income inequality, some economists are pushing back, suggesting that it is not income inequality we should be concerned with but rather income mobility. Income mobility describes the ability of individuals to move up and down the income ladder over some period of time. As long as mobility is healthy, they argue, society can remain egalitarian in the face of inequality, because the poor can move up and the rich down.

Intuitively, some observers assume that higher income inequality should be correlated with decreased income mobility as the rich build a bigger lead on the rest of society. But there is little consensus about whether and how income mobility has changed. What little research does exist is inconsistent with regards to findings, methods, and data sources. Equitable Growth grantees Michael D Carr and Emily E Wiemers at the University of Massachusetts-Boston used a new dataset to revisit the measurement of earnings mobility, the part of income that comes from work. Their results suggest that lifetime earnings mobility has declined in recent years.

—Austin Clemens
New Analysis Shows It Is More Difficult for Workers to Move up the Income Ladder

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