Long-Term Inequality and Mobility

Public Policy Brief No. 12-1
by Katharine Bradbury

This brief investigates the mobility and income situation of family heads and spouses who have low long-term incomes, where long-term refers to average family income over a 10-year period. The data show that most of those in the poorest one-fifth of the long-term income distribution during the 1996–2006 period spent all or nearly all of the period’s years in the poorest fifth of the single-year income distribution, and those who escaped did not move far. Moreover, this situation has worsened over time, with the long-term poor more “stuck” at the bottom in the 1996-2006 period than they were in 1976–1986 and 1986–1996. At the same time, the real incomes of the long-term poorest fifth have not grown as fast as the incomes of those in higher fifths, both from year-to-year within a period and from one period to the next. While it is well known that income inequality has risen in the United States in terms of single-year incomes, this brief documents that limited mobility has led to an increase in the inequality of long-term incomes as well.

JEL Classfications: D31, D63, I32

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