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Relative Intragenerational Economic Mobility: A Cross-Period Analysis from 1968 to 2009

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Abstract

Recent debate about income inequality has occurred with good reason, as changes in income inequality are critically important for long-term economic prosperity, business profitability, and particularly for the quality and accessibility of labor in the market today. However, what is equally important and less discussed is economic mobility, or the capacity of an individual or a family to improve their financial standing, specifically as it relates to income and wealth. In this paper, we examine statistics on economic mobility in the United States. Our findings suggest that while economic mobility still exists, the likelihood of a household making a large jump out of poverty and into wealth declined from 1999 to 2009. The message of our findings to policymakers is that, rather than a redistribution of wealth from the top of the income distribution to the bottom, what is really needed is broader access to affordable education, better essential nutrition, more stable early childhood development experiences, and basic financial literacy training for all income groups.

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Notes

  1. While we do not have panel data to prove it, our hunch is that this downward pressure on economic mobility for lower-income U.S. workers probably coincided with upward pressure on economic mobility for lower-income Asian workers during the 1999-2009 period.

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Authors
  1. John E Silvia
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  2. Tim Quinlan
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  3. Joseph Seydl
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*John Silvia is a managing director and the chief economist for Wells Fargo. Based in Charlotte, NC, he has held this position since he joined Wachovia in 2002 as the company's chief economist. Prior to his current position, Silvia worked on Capitol Hill as senior economist for the U.S. Senate Joint Economic Committee and chief economist for the U.S. Senate Banking, Housing and Urban Affairs Committee. Before that, he was chief economist of Kemper Funds and managing director of Scudder Kemper Investments, Inc. He was awarded a NABE Fellow Certificate of Recognition in 2011 for “outstanding contribution to the business economics profession and leadership among business economists of the nation.” For the second time in three years, he was recognized for the best overall forecast by the Federal Reserve Bank of Chicago, as well as the best unemployment rate forecast for 2011. He holds B.A. and Ph.D. degrees in economics from Northeastern University and a master's degree in economics from Brown University.  Tim Quinlan is an economist at Wells Fargo and provides analysis on financial markets and macroeconomic developments in the major economies of the world. Based in Charlotte, he writes for the company's Monthly Economic Outlook report, the Weekly Economic & Financial Commentary, and provides regular updates on the manufacturing sector. Tim first joined the company in 2002 and prior to joining Wells Fargo, he worked for Putnam Investments in Boston from 1998 until 2002. Tim's work has been published in academic economic journals, and his comments have appeared in the Wall Street Journal and New York Times. He also appears on TV news programs in the United States and Canada. Tim earned his bachelor's degree in American studies with a concentration in the classics from Siena College in upstate New York.  Joseph Seydl is a postgraduate student at the London School of Economics, where he is pursuing a master's degree in economics and philosophy. Prior to his postgraduate studies, Joe worked as an economic analyst for Wells Fargo. His research interests are in public policy, macroeconomics, and economic methodology. He earned his bachelor's degree in mathematics and economics from Lehigh University.

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Silvia, J., Quinlan, T. & Seydl, J. Relative Intragenerational Economic Mobility: A Cross-Period Analysis from 1968 to 2009. Bus Econ 48, 67–76 (2013). https://doi.org/10.1057/be.2012.39

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