An extended piece, co-authored with Ben Spielberg, on what public policy can do to help increase the mobility of those on the wrong side of the inequality divide, over at the Atlantic (note cute picture above lead).
This work led me to do a deep dive into the rich economic mobility literature. I’ll have more to say about this in coming weeks, but the Atlantic piece comes out of a paper we wrote for the Peterson Foundation (Scott Winship of the Manhattan Institute wrote a paper on the same theme; also at this link).
A few topline thoughts to which I hope to return:
–The mobility data are non-trivially limited. I believe the stuff that shows low levels of mobility here relative to other countries and the stuff that shows “stickiness in the tails” of the income distribution (see the article). But it’s hard to discern trends over time, especially when you consider that you’d need to observe families across many decades to reliably determine where someone ends up economically relative to where they started. Moreover, most of the data use income, when wealth is probably a more important determinant (and given that wealth inequality has gone up even more than income inequality, the mobility differences may not be trivial; OTOH, there’s some new wealth out there as well, implying greater mobility, so it’s not clear what better measures would show; OTOOH, it’s heavily racially concentrated, so we can be pretty certain shifting from an income to a wealth focus would show minority mobility to be even more limited than it already is).
–The positive impact of some safety net programs on future earnings, education and health outcomes is highly germane and really interesting; here’s a useful review of what’s known.
–As the work of Chetty et al in this space reveals, measurement choices matters a lot. They show, for example, that some measures of inequality, especially those most sensitive to dispersion in the middle end of the income scale, correlate significantly with mobility, while other measures (top 1% income shares) do not.
–Too often, participants in this debate lack a counterfactual. Without some idea of what you’d expect to happen given all the countervailing forces–inequality pushing mobility rates down; anti-poverty interventions pushing them up–no one knows what to make out of observations like “the rate of mobility has been flat.” Compared to what?!
Bottom line, we’ve got a lot of inequality and not enough mobility in this land. That means that if you’re stuck in the bottom, the rungs of the ladder going up are further apart than ever. As Ben and I argue, we need to provide the less advantaged with a lot more opportunities, and like it or not, that’s going to require going after inequality.