The Fading American Dream: Trends in Absolute Income Mobility Since 1940
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.