In a Fixed Amount of Time, It Is Easier to Run a 5K Than a 10K

by Reihan Salam

Because I’ve had such a hard time finding clear numbers on household incomes at the 10th, 50th, and 90th percentiles across countries, I’ve asked a few colleagues and friends to help me gather information. I hope to have a chart for you soon, and to give credit where it is due! Briefly, however, I wanted to dwell on the following passage from my latest column:

One reason America has less relative mobility than many other rich countries is that the gap separating the top fifth from the bottom fifth is very large. To illustrate, compare a four-person household in Denmark, which has a high level of relative mobility, to one in the United States, which has a low level.

In 2004, Danish households at the 10th percentile earned $25,500, considerably more than the $19,968 income of American households at the 10th percentile. Danish households at the 50th percentile earned around $45,340 against around $53,344 in the U.S. And Danish households at the 90th percentile earned around $70,838 against just under $113,474 in the U.S. Making it from $25,500 to $70,838 is, for obvious reasons, easier than making it from $19,968 to $113,474.

While Danish households at the 10th percentile fare somewhat better than U.S. households at the 10th percentile, both countries do much better on this score than most others in the rich world. At the 90th percentile, households in Luxembourg, the U.S., Britain, Canada, Switzerland, and Austria pull far ahead of their counterparts in terms of market income.

Notice that you lose a lot of valuable information when all you consider is, say, the ratio of P90/P10. Absolute incomes get lost, which obscures important facts about well-being across societies.