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American Economic Review Vol. 104 No. 5 2014

Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility

Raj Chetty1; Nathaniel Hendren2; Patrick Kline3; Emmanuel Saez4; Nicholas Turner5

1 Harvard University, Littauer Center 226, Cambridge, MA 02138 (e-mail: ) · 2 Harvard University, Littauer Center 235, Cambridge, MA 02138 (e-mail: ) · 3 University of California, Berkeley, 631D Evans Hall, CA 94720, (e-mail: ) · 4 University of California, Berkeley, 530 Evans Hall, CA 94720 (e-mail: ) · 5 US Treasury, 1500 Pennsylvania Ave, Room 1222A, Washington, DC 20220 (e-mail: )

Abstract

We present new evidence on trends in intergenerational mobility in the United States using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child's probability of attending college and her parents' income rank. We also calculate transition probabilities, such as a child's chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the “birth lottery” - the parents to whom a child is born - are larger today than in the past.

DOI
10.1257/aer.104.5.141
Volume
104
Issue
5
Pages
141-147
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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