Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility

36 Pages Posted: 25 Jan 2014 Last revised: 19 Feb 2014

See all articles by Raj Chetty

Raj Chetty

Harvard University

Nathaniel Hendren

Harvard University - Department of Economics

Patrick Kline

University of California, Berkeley - Department of Economics

Emmanuel Saez

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Nick Turner

Board of Governors of the Federal Reserve System

Date Written: January 2014

Abstract

We present new evidence on trends in intergenerational mobility in the U.S. using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child's probability of attending college and her parents' income rank. We also calculate transition probabilities, such as a child's chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the "birth lottery" - the parents to whom a child is born - are larger today than in the past.

Suggested Citation

Chetty, Raj and Hendren, Nathaniel and Kline, Patrick and Saez, Emmanuel and Turner, Nick, Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility (January 2014). NBER Working Paper No. w19844. Available at SSRN: https://ssrn.com/abstract=2384301

Raj Chetty (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
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Nathaniel Hendren

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Patrick Kline

University of California, Berkeley - Department of Economics ( email )

508-1 Evans Hall #3880
Berkeley, CA 94720-3880
United States

Emmanuel Saez

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
510-642-4631 (Phone)
510-642-6615 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nick Turner

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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