Exactly. And when you try and track people across decades, things start to look different.
https://medium.com/@russroberts/do-the-rich-capture-all-the-...
https://medium.com/@russroberts/do-the-rich-capture-all-the-...
> There is one study of progress over time that follows parents and children that is gloomy and that is “The Fading American Dream: Trends in Absolute Mobility Since 1940” by Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang (Chetty et al) They find that if you were born in 1940, you had a 92% chance of surpassing your parents income. But if you were born in 1984, the number is a depressing 50%. Chetty et al control for age — this is for parents and children when they are both 30. This does suggest that the American dream is dead or at least dying — half of the children do better than their parents but half do worse, suggesting no progress over time.
The author then says that we should measure income differently by using a non-standard measure of inflation. But if we had just used that non-standard measure on the wage data of Piketty et al., we would've arrived at the same conclusion anyway?
From what I've read, most social mobility metrics are from low quintiles to higher quintiles.
So if in 1984, 50% of children do better than their parents, and that 50% is mostly the bottom half (I have no idea if it is), then you're doing pretty good in terms of social mobility, no? People making below the median are doing better.
And I would also expect that social mobility would decrease as an economy "matures". If you're in a developing country seeing 7-10% GDP growth, then you'd hope mobility is higher than an economy growing at 1-2% per year.
They address that in the paper:
> Higher GDP growth rates do not substantially increase the number of children who earn more than their parents because a large fraction of GDP goes to a small number of high income earners today. To see why absolute mobility is insensitive to the growth rate when growth is distributed unequally, consider the extreme case in which one child obtains all of the increase in GDP. In this case, higher GDP growth rates would have no effect on absolute mobility. More generally, GDP growth has larger effects on absolute mobility when growth is spread more broadly, allowing more children to achieve higher living standards than their parents. Higher GDP growth and a broader distribution of growth have a multiplicative effect on absolute mobility: Absolute mobility is highest when GDP growth rates are high and growth is spread broadly across the distribution.