Greg Mankiw reports that Chetty/Saez’s recent study on income mobility finds that “91 percent of the variance [in a person’s income] is unexplained by [their] parents’ income.” “Based on adoption studies,” Mankiw speculates that “conservatively…half…of that 9 percent… [stems from] genetics rather than environment… [which] leaves only 4.5 percent of the variance attributed directly to parents’ income.” He notes that even if universal preschool could “completely ... Read More
Chetty & Saez distance themselves from prior claims that government expenditures financed by progressive taxation reduces poverty
Lost in the coverage surrounding Chetty & Saez’s newly released paper, which debunks the claim that income mobility is declining in the U.S., are the provocative conclusions in their companion paper, “Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States”. The authors seems to back off their prior claim that, “the level of local tax expenditures…is positively correlated with intergenerational mobility…that this correlation ... Read More
Chetty and Saez debunk the claim that income mobility is declining in the U.S.
Chetty and Saez’s new study, “Is the United States Still a Land of Opportunity? Recent Trends in the Intergenerational Mobility,” debunks the notion that income mobility in the U.S. has declined. They conclude, “Contrary to the popular perception, we find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts.” In fact, “the probability that a child from a low-income family (e.g., the bottom 20%) ... Read More
