Wednesday, March 9, 2011

Income Inequality and Mobility

link here to article

This article (via Mark Thoma through Brad DeLong) analyzes income mobility data in the US. Its hard to argue against the data which show that income inequality has been increasing. One tactic has been to argue that the data only provide a snapshot of inequality in given year. It does not matter if inequality is rising as long as different people are moving into the top 1%. Of course there is some mobility but its hard to debate those who claim that is substantial since this is undefined. Conservatives also claim that income mobility is rising. They can point to several young entrepreneurs as examples. The claim that mobility has been rising can be answered with data. The data examined in this article do not support the claim. In fact, other studies, not discussed in this article, show that mobility in the US below that of many countries in Europe. The claim that America is the land of opportunity for all is not supported by mobility data.

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