Scott Winship summary on mobility and inequality

by on February 16, 2012 at 2:20 pm in Data Source, Economics | Permalink

Read it here, excerpt:

…evidence on earnings mobility in the sense of where parents and children rank suggests that our uniqueness lies in how ineffective we are at lifting up men who were poor as children. In other words, we have no more downward mobility from the middle than other nations, no less upward mobility from the middle, and no less downward mobility from the top. Nor do we have less upward mobility from the bottom among women. Only in terms of low upward mobility from the bottom among men does the U.S. stand out.

skeptic February 16, 2012 at 2:27 pm

So eventually almost all American men will be poor, I suppose.

Miley Cyrax February 16, 2012 at 2:38 pm

+1 percentiles

Miley Cyrax February 16, 2012 at 2:40 pm

Err, for skeptic that is.

Rahul February 16, 2012 at 2:42 pm

Doesn’t every increment of upward mobility have to be balanced by downward mobility? If there is lower upward mobility from the bottom it has to be compensated by lower downward mobility somewhere else?

Andrew' February 16, 2012 at 2:48 pm

Ha! Goes to show what you guys know. This is what our prisons are for. America, fuck yeah!!!

Miley Cyrax February 16, 2012 at 2:54 pm

Kind of. Downward mobility in the form of the rich outbreeding the poor is indicative of an improving society, despite people cherishing observed upward mobility like it’s a good thing in and of itself.

John Thacker February 16, 2012 at 2:45 pm

Judging from the link Scott provides, countries that do the same (some slightly better, some slightly worse) than the US in this regard are the UK, France, Spain, and Italy. Australia, the Nordic countries, and Canada do better.

An intriguing footnote from that link also states that the results are the same when considering only children of immigrants:

Studies of the intergenerational mobility of immigrants in both countries have found that the father-son
earnings elasticities are no different than for the overall population: ranging from 0.4 to 0.6 in the
United States and essentially 0.2 in Canada.

.

John Thacker February 16, 2012 at 2:46 pm

This despite(?) the US accepting many more low-skilled and illegal immigrants, and Canada having a strong bias in favor of high skilled immigrants.

Peter Whiteford February 16, 2012 at 5:15 pm

The lower the elasticity the higher the mobility, so in Canada migrants are considerable more mobile than in the USA. Zero means there is no relationship at all between father-son earnings, while 1 means that all sons are in the same relative position as their fathers.

But the fact that immigrant mobility is roughly the same as native mobility suggests to me that the causes of higher mobility are not related to immigrant status.

GiT February 16, 2012 at 2:47 pm

Is incarceration a likely culprit?

Michael B Sullivan February 16, 2012 at 3:36 pm

Certainly, whenever I see an exception to a general upward trend, and the exception applies only to bottom-quintile males, I strongly suspect incarceration.

Steven Hales February 17, 2012 at 11:42 pm

[Self important narrator's voice as a dramatic aside] Nobody ever expects the US Judicial System. [scene behind self important narrator: Men in black robes rushing hurriedly through the streets knocking on doors]

SPERGLORD ECON MAJOR February 17, 2012 at 1:34 am

NOT LIKELY. AS A NERDY SHUT-IN AND ASPIRING PUA SOCIOPATH, MY CORRECT AND LOGICAL OPINION IS THAT THESE PEOPLE ARE BLACK.

I LOOK FORWARD TO A FUTURE WHERE I RULE THEM WITH MY IRON ECTOMORPHIC FIST.

CBBB February 17, 2012 at 1:24 pm

+1000
This basically sums up the entirety of the comments of Marginal Revolution, sans mine

Miley Cyrax February 16, 2012 at 2:48 pm

Observed mobility is not the same as opportunity for mobility due to assortative mating and general heredity, as I always say around here. Policy decisions should be based off discussions of the latter, not the former.

A perfect meritocracy would result in de facto castes due to heredity and assortative mating, as pointed out before by Razib on GNXP and Harpending and Cochran on WestHunter.

Rahul February 16, 2012 at 2:52 pm

So, the ancient Indians got it almost right after all?

ad*m February 16, 2012 at 3:34 pm

Stop applauding Razib for reinventing wheels. Krueger wrote about this in 2002:

http://www.nytimes.com/2002/11/14/business/14SCEN.html?pagewanted=print&position=top

and Kamolnick has been working for what seems forever:

Kamolnick, Paul. 2005. The Just Meritocracy: IQ, Class Mobility, and American Social Policy. Prager press

CBBB February 16, 2012 at 3:48 pm

I don’t see the difference between having some elite because of inheriting titles and having some elite because they inherited IQ. Neither seems just to me – it’s all luck based.

Andrew' February 16, 2012 at 4:04 pm

So what?

CBBB February 16, 2012 at 4:11 pm

“Kamolnick, Paul. 2005. The Just Meritocracy: IQ, Class Mobility, and American Social Policy.”

It can’t be just

Andrew' February 16, 2012 at 4:21 pm

Why not? First of all, it’s not really luck. It may be “unearned” but the “unlucky” haven’t earned it either.

Bernard Guerrero February 16, 2012 at 4:24 pm

Define “just”. If you and I play ping-pong and you regularly win because you were born with better hand-eye coordination (or a better attention span and willingness to practice), this would typically be seen as a “just” outcome.

msgkings February 16, 2012 at 4:25 pm

+1 to Andrew’. Or in other words, life’s not fair. You play the hand you are dealt.

Cliff February 16, 2012 at 8:01 pm

The difference is Harrison Bergeron

CBBB February 16, 2012 at 8:07 pm

Hmm this looks like a pretty good plan to me

Tracy W February 17, 2012 at 5:04 am

Well it depends. Are the elite the elite just because of their IQ, or because they use that IQ to do things that turn them into the elite? An elite made up of effective doctors, entertaining writers (Dave Barry, Tyler Cowan), entrepreneurs like Steve Jobs, etc, is very different on their effects on the rest of society to an elite that is there just because they inherited a high IQ, regardless of whether they do anything useful with said IQ.

TallDave February 16, 2012 at 3:53 pm

The assortative mating aspect definitely doesn’t get enough attention.

CBBB February 16, 2012 at 4:04 pm

What? Not ENOUGH attention – this is like when I post that Krugman doesn’t have enough of a public platform. Tyler Cowen practically says “Assortative Mating” every other sentence.

Andrew' February 16, 2012 at 4:22 pm

Can you say “sample bias”?

msgkings February 16, 2012 at 4:27 pm

He can say it, but he doesn’t know what it means.

John February 16, 2012 at 3:12 pm

I can’t tell if this is a captain obvious point, but how much of this is just because black people have no upward mobility? Did they control for that? A quick scan of the article suggests it wasn’t discussed which is sort of crazy since it is the elephant in the room.

celestus February 16, 2012 at 3:37 pm

Race is part of the low mobility story- especially when comparing the US to Canada, Australia, New Zealand, and Scandinavia- but here he did claim that there’s plenty of mobility for low-income women.

Floccina February 17, 2012 at 3:35 pm

I am afraid that John maybe be right. Black American men, for whatever reason, may be less likely to put up with what must be put up with to make money and climb out of the bottom 20%.

TallDave February 16, 2012 at 3:40 pm

Or, they choose (possibly rationally) to be poor.

Really, it’s surprising mobility is as high as it is in a society where you can be as well fed, clothed, and housed as one can here and now without working very hard. I was pretty happy with my lifestyle when I made <$20K, it was only for pursuit of status that I moved on to (allegedly) better things.

CBBB February 16, 2012 at 3:47 pm

What a red herring – take it from me life is shit without money even if you have food and shelter. There’s substantial motivation to move up if you can.

TallDave February 16, 2012 at 3:52 pm

As I said, I was happy without money. Lots of people are.

You’ll have to forgive me for entertaining some doubt that money would change your attitude much.

Miley Cyrax February 16, 2012 at 4:01 pm

Indeed, gains in happiness from gains in income fade quickly as people re-adjust their expectations and their peer group. People seem to be more concerned with relative differences in income than absolute standards of living.

Rahul February 16, 2012 at 4:03 pm

The trick is to keep gaining. Forever?

Dan Weber February 16, 2012 at 4:59 pm

Continuously grow your standard of living, even if very slowly.

TallDave February 16, 2012 at 6:11 pm

Yeah, that’s what I wonder about. If at minimum wage you can have a lifestyle that in absolute standards is the envy of virtually everyone who lived before 1900 and half the world today, how strong can the incentive to produce really be?

Cliff February 16, 2012 at 8:05 pm

Not sure about that. I know there are studies distinguishing “happiness” from “life satisfaction.” If I recall, the latest “happiness” research indicates that absolute standards of living are very important, as one would expect. “Happiness” may by a personality trait more than anything else.

Michael B Sullivan February 17, 2012 at 12:13 pm

“Happiness” studies (hedonic studies in general) are sort of bullshit, in my opinion. Getting people to put a simple numerical rating on such a complex and subjective thing introduces too much error for them to be useful.

CBBB February 16, 2012 at 4:03 pm

What are you kidding me? Money would solve all of my problems.

Rahul February 16, 2012 at 4:05 pm

Wow. I’ve never seen you so optimistic before.

CBBB February 16, 2012 at 4:09 pm

Ha! I don’t see how it’s optimistic – I might as well be saying all my problems could be solved by sipping ambrosia from the Holy Grail every morning.

Andrew' February 16, 2012 at 4:23 pm

What a pain in the ass that would be.

msgkings February 16, 2012 at 4:32 pm

Rahul, CBBB knows he’ll always be mad and broke, so he takes it out on us (and Tyler). I don’t see optimism here.

CBBB February 16, 2012 at 5:50 pm

I guess that’s the glory of the internet – in the past I might just be miserable by myself but now the internet allows me to spread my misery to the world!

Mark Thorson February 16, 2012 at 4:14 pm

Just a few days ago you were defining poverty as an annual income below $60,000, later revised upward to $80,000. I don’t know what you need to be happy, but it’s something on the order of a major cocaine habit and subscriptions to every Elsevier journal.

CBBB February 16, 2012 at 4:18 pm

Ah so you see there are things you can’t purchase so easily on 20,000 a year

Bernard Guerrero February 16, 2012 at 4:27 pm

I’d suggest switching to crack, there’s a substantial cost savings.

msgkings February 16, 2012 at 4:30 pm

If only they would pay you to troll….

Mark Thorson February 16, 2012 at 5:05 pm

Now I’ve got you figured out, CBBB. You’re going up the bridge. You won’t be happy until you attest to OT8 at Flag.

Ricardo February 17, 2012 at 3:58 am

TallDave, median income among men in the United States in 2010 was $32,000. Among white men, it’s $34,000. Whether there is a welfare system or not, men who are not educated above the high school level or do not have specific in-demand skills face pretty low returns to hard work.

Of course, the low level of mobility may involve a bunch of people making individually rational choices but then that really doesn’t address the main issue. After all, if returns to work are much lower among those without a decent education, improving the quality of education (easier said than done, I know) might improve mobility. Likewise, we might look at why median wages for men are so low and whether some policies might help wage growth over time and give more men an incentive to work harder. Have Canada and the Nordic countries also experienced such a crappy level of median wage growth for men over the same time period?

TallDave February 17, 2012 at 1:15 pm

But remember, education is a kind of work. A lot of people are happy to accept low-paid work to avoid education.

Floccina February 17, 2012 at 3:38 pm

I feel the same. When I was making just above minimum wage I left work when I left work and did not think about it.

I like to say “I have been a low wage earner (for the USA) and a high earner and it is better to be a high earner but not that much better.

Seth February 16, 2012 at 5:06 pm

But with greater inequality, we should be doing really well in absolute terms, no?

Hermes Bags Sale February 16, 2012 at 10:38 pm

She sits in the first row behind the courtside seats, directly across from the Lakers’ bench, the coolest seat in the house.

The Anti-Gnostic February 17, 2012 at 10:23 am

Freedom to fail, i.e., downward mobility, is an under-appreciated concept. Idiots with cash flow who buy dot-bomb stock and over-leveraged McMansions should be smacked, and their assets (and their debt) redistributed at realistic values. The market will do this just fine.

TBTF policy prevents downward mobility. There is also a long list of fiscal and monetary policy designed to inhibit upward mobility. These are the economics of a banana republic.

TallDave February 17, 2012 at 1:16 pm

+1

Floccina February 17, 2012 at 3:39 pm

+1

The Anti-Gnostic February 17, 2012 at 10:29 am

“Only in terms of low upward mobility from the bottom among men does the U.S. stand out.”

Welfare, women and immigrants.

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