Karen Gardiner

Policy Implications of New Data on Income Mobility

The existence of income mobility may moderate concerns about growing inequalities, especially if income mobility has increased. However, the evidence for rising mobility is equivocal and its extent is not enough to offset the growth of cross-sectional inequality. There is a case for greater concern for, and different policies toward, those persistently or recurrently poor than those only temporarily poor, but the data analyzed here suggest that the bulk of low income observations come from the first two categories. Analysis of income mobility may help understand why peoples incomes follow different trajectories and how policy might affect this.