U.S. Intragenerational Economic Mobility From 1984 to 2004

Trends and Implications

U.S. Intragenerational Economic Mobility From 1984 to 2004

QUICK SUMMARY

This 2008 report, U.S. Intragenerational Economic Mobility from 1984 to 2004: Trends and Implications, explored how Americans have moved up and down the income ladder over the last two decades, and whether it has been more difficult for Americans to get and stay ahead in the last decade. The report focused on intragenerational mobility: how individuals change economic positions within their own lifetimes.

This 2008 report, U.S. Intragenerational Economic Mobility from 1984 to 2004: Trends and Implications, explored how Americans have moved up and down the income ladder over the last two decades, and whether it has been more difficult for Americans to get and stay ahead in the last decade. The report focused on intragenerational mobility: how individuals change economic positions within their own lifetimes.

The report revealed that intragenerational mobility rates have changed little since the 1980s and that there remains considerable stickiness or immobility at the bottom of the income distribution. Comparing data on 25- to 44-year olds from the periods of 1984 to1994 and 1994 to 2004, the analysis broke the study population into five equal size income groups (quintiles) and computed the share of the population that moves into, and out of each group over the two ten year periods.

SOME KEY FINDINGS:

  • Over both time periods, more than half of those in the bottom income quintile remained there ten years later, and seven in ten remain below middle-income status. Less than 4 percent in the top income quintile fell all the way to the bottom.
  • In the last 20 years, the probability that an individual would leave the bottom quintile was 30 percentage points higher for those with more than a high school diploma compared to those who never graduated, making education the most significant driver of upward intragenerational mobility.
  • Working more hours has also drives upward intragenerational economic mobility. Between 1994 and 2004, working an additional 1,000 hours over the course of a year increased the probability an individual would leave the bottom quintile by 12.5 percentage points; the probability was just five percentage points in the previous 10-year period.
  • Marital status and spousal work are no longer drivers of intragenerational economic mobility; individuals with and without a working spouse have equal likelihoods of entering and leaving the bottom quintile.
  • Being non-white or female is less likely to inhibit one's upward intragenerational economic mobility in the most recent period but the race and gender gaps in mobility remain an important part of the story.

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