The Corner

Economy & Business

Does the U.S. Have Lower Economic Mobility than Other Countries?

I’ve been focused on writing a 5,000-word take-down of a piece by the New America Foundation’s Phil Longman that claims each successive generation in the U.S. has been poorer in recent years, but over the weekend Longman’s colleague Michael Lind made a claim that is also worth debunking. In a Politico essay arguing that the South has particularly undesirable economic outcomes, Lind writes:

Today there is more inter-generational social mobility in Europe than in the United States, contrary to the American myth that the United States is still the world’s No. 1 land of opportunity. The Economic Mobility Project of Pew Charitable Trusts has shown that children are far less likely to rise above the socio-economic levels of their parents in the U.S. than are those in Britain, Canada and Australia, as well as Germany, France and the Nordic nations. The American South, with the lowest rates of intergenerational social mobility in the U.S., clearly skews the national statistics, creating an embarrassing and depressing version of American exceptionalism.

I was the research manager of Pew’s Economic Mobility Project for over three years, and I can tell you that Pew never put out anything saying what Lind says here. Lind is confusing two different conceptualizations of economic mobility. “Relative mobility” occurs when a child grows up to have a different position, or ranking, compared with her peers than the ranking of her parents with respect to their peers. If a child starts in the poorest fifth of households but ends up in the middle fifth as an adult, that is upward relative mobility.

Pew did indeed publicize the view — conventional then and now — that the United States has especially low rates of relative mobility compared with other countries. This was my view at the time as well, which I conveyed in National Review. Recently, I have written a series of essays questioning this conventional wisdom. It turns out that the most widely available measure of “relative mobility” actually reflects changes in inequality, and other analyses using purer relative mobility measures to compare countries suffered from data problems. The most recent research suggests that in fact, the U.S. has relative mobility rates very close to those in Canada, Sweden, Finland, Norway, Germany, and the United Kingdom.

But that’s not why Lind’s claim is wrong. Lind is actually making a claim about absolute mobility — that American children are more likely than their counterparts in other countries to be better off than their parents in absolute terms. One can experience absolute mobility without relative mobility if everyone ends up, say, 50 percent better-off than their parents, because no one’s ranking would change between generations. Even if the U.S. has worse relative mobility than other countries, that would not imply that it has worse absolute mobility.

In fact, no one has ever conducted cross-national research on absolute intergenerational mobility. I know this because I was desperately trying to fund a paper on the topic while at Pew. So we have no idea whether children in the U.S. are less likely — let alone “far less likely” — to “rise above the socio-economic levels of their parents” than children in other countries.

What looks like fairly low levels of relative mobility in the U.S. translates into surprisingly high levels of absolute mobility. My research finds that roughly 40 percent of today’s 40-year-olds who grew up in the bottom fifth of income remain in the bottom fifth. But over 80 percent are better off in absolute terms than their parents, after adjusting for the rising cost of living and declining household size. Stunningly, the median change experienced by today’s fortysomethings was a 93 percent rise in household income compared with that of their parents.

The South has lower relative mobility than the rest of the United States, as Raj Chetty’s research demonstrated, but we don’t know whether it has lower absolute mobility than other regions, and we don’t know that the United States has lower absolute mobility than other countries. Lind’s just wrong on this point.

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