Measuring Upward Economic Mobility
Traditionally perceived as a highly mobile society, the U.S. has recently been shown to be less mobile than many people believe and much less mobile than many other high-income countries, particularly in Europe. This finding has sparked something of a holy war among adherents of competing measures of economic mobility. Those on the political left tend to favor measures of relative mobility. These measures indicate how freely individuals (or their offspring) can change positions in a population distribution ordered along some social dimension, such as income or education. Measures of relative mobility are designed to capture notions of fairness and the degree to which everyone has an equal chance at improving their lot in life, regardless of their origins. Those on the political right tend to prefer measures of absolute mobility. These measures register change in individuals’ economic or social outcomes irrespective of any shift in their relative position in the population distribution. This can happen when the whole distribution moves up (for example, during an economic growth spurt) or down (during a depression).
Having developed a measure of economic mobility based on a set of clearly stated goals which they believe simultaneously addresses the shortcomings of both relative and absolute mobility measures, Garance Genicot and Debraj Ray now propose to apply their newly-derived measure to data from a diverse group of high-income countries. They expect this research to make two primary contributions. First, it will add to the large and growing literature comparing income mobility between the U.S. and Europe by applying a measure of economic mobility with strong conceptual foundations. Second, their measure of mobility will allow them to make a clear distinction between the mobility that occurs due to overall growth and the mobility that occurs due to faster growth among those at the bottom.