Sylvia Nasar (June 17, 1992): One Study's Riches, Another's Rags https://www.nytimes.com/1992/06/17/business/one-study-s-riches-another-s-rags.html?searchResultPosition=233: "Two teams of researchers asking the same politically sensitive question—both tracking individual households over the decade—have reached quite different conclusions. A Treasury study released earlier this month said it was relatively routine for someone who started out poor to end up affluent. But a study by the middle-of-the-road Urban Institute concludes that such Horatio Alger stories were, in fact, rare..... Both also confirm one of the best-known facts of modern economics: for rich and poor alike, earnings rise from the time individuals enter the work force through middle age—roughly doubling, on average—and fall after retirement.... Leading labor and tax economists said that the Treasury study did not shed much light on the matter of how much social mobility there is in America.... 'This isn't your classic income mobility', said Kevin Murphy, a labor economist at the University of Chicago. 'This is the guy who works in the college bookstore and has a real job by his early 30's'. The conflicting studies have appeared in the midst of a bareknuckled election-year debate over who won—and who lost—from Reaganomics. In a period of slow economic growth, income distribution has elbowed its way into the political arena...

..."While the poor can 'make it' in America and the wealthy can 'fall from grace,' these events are neither very common nor more likely to occur today than in the 1970's," wrote Ms. Sawhill and another Urban Institute researcher, Mark Condon. The Urban Institute study found that while rich and poor alike earn more as they go from youth to middle age, the odds of moving from the bottom 20 percent in income distribution to the top 40 percent are a fraction of the odds reported by the Treasury: 1 in 10, compared with 4 in 10.

As a group, the Urban Institute study found, the poor in 1988 were worse off than the poor in 1979. And the study found that averaged over 10 years, people's incomes became markedly more unequal in the late 1970's and 1980's. The income of the top fifth rose to five times that of the bottom fifth, compared with four times as much in the late 1960's and early 1970's....

'Doing it this way moves the results pretty strongly', said Professor Murphy at the University of Chicago. 'The way to do it, using this data, is to track everybody and compare them to others in their own age groups. Take 30-year-olds and see where they stand relative to each other when they are 40 years old'. He and other economists said that the type of income mobility the Treasury found was not the social mobility that most Americans have in mind when they think about rich and poor....

Ms. Sawhill said: "We need to get beyond the politics of this. The issue is what's really happening to the American people"...


#noted #2019-10-07

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