Robert Samuelson January 29, 2014

Americans care about mobility — and are baffled by it. Therags-to-riches story is part of national folklore. And yet, mobility issaid to be declining. Is the United States still a “land of opportunity” where hard work, talent and good ideas are rewarded? No, say manyexperts. People stay stuck in their class of birth. Well, here’s somegood news: The conventional wisdom is wrong, concludes a new study fromthe National Bureau of Economic Research (NBER).

First, some background. Mobility is a muddled concept, because it comes in two varieties and popular discussions mix the two.

One sort — “relative mobility” — concerns your place on the economicladder. Can people born at the bottom raise themselves to the top? Doupper-middle-class children drop down the economic ladder? If thesechanges don’t occur, then birth is fate: You end up where your parentsstarted.

Next is “absolute mobility.” It signifies whether eachgeneration lives better than its predecessor, reflecting newtechnologies and economic efficiencies. Everyone’s living standards canimprove, even if all people remain in their parents’ place on theeconomic ladder. The poor live better than 50 years ago; so do the rich.

In practice, both sorts of mobility are important. If people arepredictably frozen in their parents’ economic class, there’s littlereason for them to work hard in school and on the job — or to take risks by investing in new businesses and technologies. On the other hand,everyone can’t be in the top 10 percent. If there’s no general rise inliving standards, many people will feel frustrated. The only way to “get ahead” will be to move up the economic ladder. But for every person who moves up, someone else moves down.

By the conventional wisdom,American society is becoming more rigid. People’s place on the economicladder (“relative mobility”) is increasingly fixed.

Untrue, concludes the NBER study. (The study is NBER Working Paper 19844.)

“We find that children entering the labor market today have the samechances of moving up in the income distribution (relative to theirparents) as children born in the 1970s,” write the economists. Comparing their results with earlier studies covering 1950 to 1970, they alsofind little difference. Social mobility “remained remarkably stable over the second half of the twentieth century in the United States,” thestudy says.

Moreover, there’s significant shifting among classes.About a third of the children born into the wealthiest fifth ofAmericans stay in the richest fifth as adults — but two-thirds movedown. Among children born to parents in the middle 20 percent by income, about a fifth end up in the richest fifth, as do about 9 percent ofchildren born to the poorest fifth of Americans.

There’s no ideal amount of mobility. Parents matter, but they’re not everything. Theypass along strengths and weaknesses to their children, but children canboth overcome their parents’ vices and squander their parents’ virtues.It ought to be reassuring that theories of growing American rigidity are — at least for now — exaggerated.