Trends in Absolute Income Mobility in North America and Europe

Authors:

Robert Manduca, University of Michigan, Ann Arbor
Maximilian Hell, Code for America
Adrian Adermon, Institute for Evaluation of Labor Market and Education Policy
Jo Blanden, University of Surrey
Espen Bratberg, University of Bergen
Anne C. Gielen, Erasmus University Rotterdam
Hans van Kippersluis, Erasmus University Rotterdam
Keun Bok Lee, University of California, Berkeley
Stephen Machin, London School of Economics
Martin D. Munk, Aarhus University
Martin Nybom, Uppsala University
Yuri Ostrovsky, Massachusetts Institute of Technology
Sumaiya Rahman, Frontier Economics
Outi Sirniö, Finnish Institute for Health and Welfare

Abstract:

We compute rates of absolute upward income mobility for the 1960-1987 birth cohorts in eight countries in North America and Europe. Rates and trends in absolute mobility varied dramatically across countries during this period: the US and Canada saw upward mobility rates near 50% for recent cohorts, while countries like Norway and Finland saw sustained rates above 70%. Decomposition analysis suggests that differences in the marginal income distributions, especially the amount of between-cohort income inequality, were the primary driver of differing mobility rates across countries. We also demonstrate that absolute mobility rates can be accurately estimated without linked parent-child data.