Has income inequality increased? Is inequality greater in the United States than in other affluent countries? Answering these questions requires taking mobility into account. Over the next few weeks I’ll put up several posts on this.
When social scientists or policy makers talk about mobility, they often mean different things. Here are a few key distinctions:
1. Income or occupation?
Traditionally, sociologists have tended to examine occupational mobility while economists have been more interested in mobility of earnings and income. In recent years this distinction has faded somewhat, with scholars in both disciplines concentrating mainly on income and earnings.
2. Intergenerational or intragenerational?
Intergenerational mobility refers to movement between generations. The question is typically something like: How does a person’s income compare to that of her/his parents? Intragenerational mobility, in contrast, refers to movement up or down within generations — over the life course. Research on intragenerational mobility examines how people fare during their working career compared to how they were doing at, say, age 18 or 25 or 30.
3. Absolute or relative?
Absolute intragenerational mobility refers to changes in income compared to the income one started with. Suppose a person begins her working career with an income of $25,000. If a decade later her income is $30,000 (adjusting for inflation), she has experienced upward absolute intragenerational income mobility.
Relative intragenerational mobility refers to the degree to which individuals move up or down compared to others in their cohort. Suppose a person’s income increases from $25,000 at the start of his working career to $30,000 a decade later, but most people who began their work life around the same time experience a larger increase. The person has experienced upward absolute mobility but downward relative mobility.
For intergenerational mobility, the distinction between absolute and relative is analogous. If a person’s inflation-adjusted income is $30,000 and her parents’ was $25,000 at a comparable point in life, she has experienced upward absolute intergenerational income mobility. Because of economic growth, we expect that such upward mobility will be the norm. The interesting question concerns the degree of upward absolute mobility and how it changes over time.
Relative intergenerational mobility depends on one’s place in the distribution. If a person’s income puts him at the 75th percentile of the distribution and his parents were at the 50th at a comparable point in their lives, he has experienced upward relative intergenerational mobility.
Relative mobility is a zero-sum phenomenon. If one person moves up in relative terms, another by definition must have moved down. Absolute mobility is not zero-sum. Both are of interest.