Income Mobility

The potential of people to change their position in the Wealth Distribution curve over time. This is a good thing, because it means your financial future isn't driven by your past. (Of course, you could personally get Downward Mobility instead of Upward Mobility.)

There's no point in talking about Income Inequality/Wealth Inequality without taking Mobility into consideration. One of the great myths of the 1980s is that "the rich got richer and the poor got poorer". We have seen from the income numbers that on the whole everyone made more money. Here we disprove one of the associated myths: that the rich got richer at the expense of a downtrodden Under Class. The dynamic U.S. economy is characterized by an extraordinary degree of income mobility that has been all but ignored in the recent debate on reducing federal income tax rates and phasing out the death (estate) tax. Opponents of tax relief are criticizing commonsense reforms because they claim that "only the rich" will benefit. Yet the notion that low-income or high-income groups are composed mostly of the same people over time is an illusion. This paper examines Entrepreneurship in order to analyze, first, the degree to which the opportunity to start or own a business affects the household's saving behavior and the implication of this behavior for the distribution of wealth and, second, the relationship between the extent of entrepreneurship in the economy and socioeconomic mobility, that is, the movement of families across wealth classes over time. Access To Education Aids Income Mobility. Parents' educational background doesn't have much to do with whether Americans attend college, according to studies by the Department Of Education during the 1980s and 1990s. Income mobility in the U.S. is only moderate. Most people see their incomes rise with age, but at some point they usually hit a plateau in the income distribution, where they fluctuate mildly for the rest of their careers. The Hubbard study of income mobility, commonly cited by conservatives, used an extremely biased sample of unusually successful American families. Social scientists and policy analysts have long expressed concern about the extent of intergenerational income mobility in the United States, but remarkably little empirical evidence is available. The few existing estimates of the intergenerational correlation in income have been biased downward by measurement error, unrepresentative samples, or both. New estimates based on intergenerational data from the Panel Study of Income Dynamics imply that the intergenerational correlation in long-run income is at least 0.4, indicating dramatically less mobility than suggested by earlier research.

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