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Is there Income Mobility in America?

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Published on Dec 27, 2012

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Are the rich getting richer while the poor get poorer? Prof. Sean Mulholland uses several statistical measures and finds that this common perception may not be accurate. A surface-level examination of statistics may indicate that the poor are getting poorer, but a more thorough study shows that there is more income mobility in the United States than many might think. Prof. Mulholland highlights data showing household income by quintile adjusted for inflation and even uses data that follows specific households over time. For example, if we look at households in the bottom quintile in 1987 and follow those individual households until 1996, about 45 percent of them have moved up to a higher quintile. In the next 10-year period, about 40 percent of households move up. Watch the video to see Prof. Mulholland's findings about income mobility for the top 20 percent of income earners over time and for U.S. households across generations, too. Prof. Mulholland says this data provides "evidence that the possibility of upward mobility in the United States is still very real."

Learn More!:

Steve Horwitz explains that, contrary to popular belief, the poor are getting richer: http://www.learnliberty.org/content/a...

Dr Frank Hollenbeck talks to Jennifer Cordingley about income inequality: http://www.youtube.com/watch?v=_KycVV...

Thomas Sowell argues that the economy has grown faster than most people realize: http://www.youtube.com/watch?v=WrtoSx...

A counterargument to Prof. Mulholland's video suggests that America is suffering from a lack of income mobility: http://www.youtube.com/watch?v=kvD7pc...

Sources:

1. Data on household income shares by quintile come from here: http://www.census.gov/hhes/www/income.... U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements, Table H-2. Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households, All Races: 1967 to 2009

2. Data on mean household income levels by quintile come from U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements, Table H-3. Mean Household Income Received by Each Fifth and Top 5 Percent, All Races: 1967 to 2009. These data can be found here: http://www.census.gov/hhes/www/income....

3. Data on relative household income mobility by quintile comes from: U.S. Treasury Department, (2008). Income Mobility of the United States from 1996 to 2005, Washington, D.C. It can be found here:
http://www.treasury.gov/resource-cent....

4. Data on generational income mobility comes from: Isaacs, Julia B. (2007). Economic Mobility of Families Across Generations. The Brookings Institutions. http://www.brookings.edu/~/media/rese...

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