Economic and Social Mobility New Directions for Data, Research, and Policy (2025) / Chapter Skim
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1 Introduction
1 Introduction
Pages 17-44
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From page 17... ...
Complementing measures of inequality of outcomes, intergenerational mobility provides information about equality of opportunity. A mobile society can foster economic efficiency by supporting human capital formation for all its members, regardless of family circumstances, and by providing labor market opportunities to people from diverse backgrounds.
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From page 18... ...
For all the value placed on equal opportunity in the American context, intergenerational mobility in the United States is relatively low compared with other affluent democracies. The degree to which adult children's earnings depend on family circumstances, known as relative mobility, is higher in the United States than in other wealthy countries (Corak, 2013b; Durlauf et al., 2022; Krueger, 2012)
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From page 19... ...
High intergenerational mobility suggests that individuals have a fair chance of achieving success regardless of their social origins. In contrast, limited mobility indicates that both poverty and privilege will persist from generation to generation, suggesting limited opportunity to achieve a standard of living independent of family (of origin)
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From page 20... ...
Measures of social class distinguish groups based on the occupational resources they control -- for example, employers, professional workers, managers, skilled manual workers, and unskilled manual workers. Measures of social class are relevant because they consider the specific kinds of labor market assets that people have access to and shape opportunity and inequality.
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From page 21... ...
The most common measure of absolute mobility is the likelihood that children will earn more than their parents in real dollars -- in other words, that they will experience upward mobility. Absolute mobility is especially salient in public debates because it provides a tangible benchmark against which individuals gauge their economic status.
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From page 22... ...
NOTES: The upward mobility rate is calculated as the percentage of children in each birth cohort whose family income at age 30, adjusted for inflation, was at least as high as their parents' family income at age 30. Incomes are measured using a combination of register and survey data in each country, as follows: Canada: Intergenerational Income Database; Finland: totalpopulation register-based longitudinal data provided by Statistics Finland; Netherlands: Netherlands register data; Norway: full population data from Statistics Norway; Sweden: full population of Swedish nonimmigrants; United Kingdom (UK)
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From page 23... ...
Because measures of relative mobility are more abstract than those of absolute mobility, Box 1-1 defines intergenerational elasticity and other measures of relative mobility. BOX 1-1 Measuring Relative Mobility The most common measures of relative mobility are intergenerational elasticity, rank– rank slope, and intergenerational correlation.
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From page 24... ...
These include matrices cross-classifying parents' and children's income quintiles, models allowing for nonlinearities in the intergenerational association, and quantile regression models examining income dispersion around the regression line (Corak & Heisz, 1999; Couch & Lillard, 2004; Eide & Showalter, 1999; Peters, 1992)
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Abundant research exists on the intergenerational income elasticity in the United States. Estimates of earnings elasticity measuring the strength of the intergenerational association have proliferated over time as administrative data become available and methodological approaches become more sophisticated.
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Higher intergenerational income elasticity indicates lower relative intergenerational mobility. SOURCE: Narayan et al.
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From page 27... ...
. By evaluating change affecting cohorts born between 1978 and 1992, this study found that relative mobility -- measured as the association between the income ranks of parents and adult children -- declined for White individuals but increased among African American individuals, resulting in a smaller Black– White income gap for people growing up in low-income households.
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found a strong empirical correlation between relative and absolute upward mobility in the United States. Both relative and absolute mobility are important, as they address different dimensions of equal opportunity and answer different policy questions.
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. Indeed, it might take decades for persistently high inequality to permeate institutions and policies in a way that substantially alters intergenerational mobility.
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We claim, however, that high inequality and excessive risk of economic downturn resulting from investments or unpredicted shocks prevent upward mobility and strengthen the association between parents' resources and adult children's well-being. Indeed, many policies designed to improve mobility are indistinguishable from policies designed to address inequality in resources or to strengthen the social safety net and reduce the exposure to risk, especially among vulnerable populations.
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This is considered indirect evidence because the researchers do not directly measure intergenerational mobility; instead, they focus on a factor along the pathway connecting parental resources with adult children's outcomes. The committee considered various types of direct and indirect evidence about intergenerational mobility, including descriptive, correlational, quasi-experimental, experimental, and qualitative evidence.
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PREPUBLICATION COPY – uncorrected proofs causality, as unmeasured factors may affect the relationship under analysis even when controlling for multiple factors such as parental education, age, or income. • Quasi-experimental evidence involves exploiting quasi-random events or natural experiments to assess the impact of mobility determinants.
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From page 33... ...
. Life Course Principles Several life course principles are relevant to understanding the process of intergenerational mobility, including lifespan development, historical context, timing of life events, human agency, and linked lives.
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. Timing of Life Events and Exposures The life course approach considers the specific timing of life events, such as completing education, entering the labor market, or having children, and exposure to macro-level events such as economic downturns or environmental hazards in influencing social and economic outcomes (Elder, 1999; Marshall & Mueller, 2003)
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From page 35... ...
Status-Attainment Perspective One variant of the life course approach specifically applied to the understanding of intergenerational mobility is the status-attainment perspective. This perspective focuses on the socioeconomic association between parents and adult children, including critical milestones that mediate the intergenerational association (Blau & Duncan, 1967; Sewell et al., 1969)
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Life Course–Ecosocial Framework Figure 1-4 presents a life course–ecosocial framework for understanding mobility processes. Intergenerational mobility is defined as the association between the socioeconomic resources of the parental generation and the adult children generation.
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Institutions Institutions represent societal systems with a structured set of rules, norms, and relationships that shape mobility processes in different domains, including family, education, labor market, legal or criminal justice, financial, and health care, among others. In the case of formal institutions, policies (e.g., minimum wage, tax rates, affirmative action, penal codes)
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Structural discrimination refers to barriers restricting access to opportunities, resources, power, and well-being of individuals and social groups based on race and ethnicity; gender; nativity; and other statuses such as sexual orientation, disability, and national origin. Discrimination operates on multiple levels, including cultural orientations; institutions such as the criminal justice system, health care, and workplaces; and interpersonal interactions.
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From page 39... ...
. Residential and educational segregation results in local social networks that are usually stratified by socioeconomic advantage and that can provide valuable mobility resources in the form of information, advice, mentorship, and connections to educational and work opportunities (Sharkey, 2016)
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From page 40... ...
and across generations. Several large studies have identified the factors that matter most for understanding immigrant integration prospects and the risks and opportunities of mobility, including human capital and other attributes at entry -- notably educational attainment, labor market skills, English fluency, mode of entry (visa/legal status)
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From page 41... ...
and of noneconomic outcomes such as health, crime, family formation, and engagement with the criminal justice system. Finally, the committee's emphasis on wealth, credit and debt is intended to supplement the historical focus of mobility research on labor market resources (mainly, educational CH 1 - 25
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From page 42... ...
Similarly, credit and debt are critical determinants of mobility risks and opportunities that do not depend directly on the labor market. For example, access to credit may promote upward mobility by allowing individuals to finance higher education or start a business, while excessive debt might induce downward mobility by causing repayment difficulties and economic insecurity.
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; and related policy domains that impact labor market participation, such as the affordability of child care or availability of paid family leave (see Morrissey, 2017; Council of Economic Advisors, 2014)
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From page 44... ...
Chapter 6 includes discussion and recommendations regarding the data infrastructure required to support future research on economic and social mobility. Chapter 7 revisits the committee's key conclusions and recommendations regarding the domains that shape mobility, discussing how they fit together to inform broad policy approaches to increasing economic and social mobility in the United States.
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Key Terms
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