The Fading American Dream: Trends in Absolute Income Mobility Since 1940
Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang
Summary
The authors measure absolute income mobility, defined as the fraction of children who earn more than their parents did at the same age, for U.S. birth cohorts from 1940 to the 1980s. Combining tax records with historical data, they show that this measure has declined dramatically over the period. They attribute most of the decline to the rising concentration of income growth rather than to slower aggregate growth.
Key findings
- Absolute mobility fell from about 90% for children born in 1940 to roughly 50% for those born in the 1980s.
- The decline occurred across nearly the entire income distribution, with the largest drops in the middle class.
- More equal distribution of growth (rather than higher GDP growth alone) would do more to restore absolute mobility.
Subjects & keywords
Cite this paper
Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, & Jimmy Narang (2017). The Fading American Dream: Trends in Absolute Income Mobility Since 1940. Science. https://doi.org/10.1126/science.aal4617
@article{chetty2017fading,
author = {Raj Chetty and David Grusky and Maximilian Hell and Nathaniel Hendren and Robert Manduca and Jimmy Narang},
title = {The Fading American Dream: Trends in Absolute Income Mobility Since 1940},
journal = {Science},
year = {2017},
doi = {10.1126/science.aal4617},
url = {https://doi.org/10.1126/science.aal4617}
}