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180 / Chapter 7 Mobility in the United States in Comparative Perspective Markus Jäntti T he United States has a much more unequal distribution of income than most developed nations. Even though it has one of the highest standards of living on average, as measured by its gross domestic product per capita, its more unequal income distribution translates into comparatively high rates of both relative poverty (50 percent of median disposable income) and absolute poverty (the official U.S. poverty thresholds) (see, for example, Meyer and Wallace, this volume; Bradbury and Jäntti 2001). Some analysts suggest that high inequality and poverty in any one year are of little public policy concern if rates of mobility are also high. For example, assume that the poverty rate measured in terms of a single year’s income is 20 percent in each of two societies. In one, every person has a one-in-five chance of being poor in any given year, but poverty in one year does not foretell being poor in the next year. In the other society, the same individuals are poor every single year. Because the first society has complete mobility and the second has no mobility, the latter society has a more serious poverty problem. Income mobility and poverty mobility are closely related to notions of equality of opportunity, whereas annual measures of inequality and poverty are related to notions of equality of outcomes. One traditional explanation for the inequality of the U.S. income distribution is that Americans value equality of opportunity more highly than equality of outcomes (Corcoran 2001, citing Turner 1960). However, Lars Osberg and Timothy Smeeding (2006) find that Americans are very similar to residents in other countries in their attitudes about inequality and about the factors that justify large economic rewards. American attitudes are more sharply divided than is the case in other countries, with a larger minority being against equalization of annual incomes. Somewhat surprisingly, Americans are just as often in favor of reducing inequality at the top of the distribution as are citizens of other countries, but they are less concerned with reducing differentials at the bottom of the distribution. Therefore, it may be that higher American inequality and poverty are not so much an expression of a preference for inequality as a phenomenon driven, at least in part, by a failure to see the relationship between equality of oppor- tunity and equality of outcomes. This chapter discusses both poverty mobility over time and intergenerational mobility, emphasizing the relationship between longand short-run measures of economic outcomes. I examine whether poverty is a persistent problem of a small group in society that does not enjoy equal opportunities or a problem that afflicts many, but for only brief periods of time. Because many individuals experience income fluctuations from year to year, poverty measured over longer periods is lower than poverty measured over short periods. One way of assessing the level of poverty mobility in the United States is to compare it to poverty mobility in other advanced economies. This chapter begins by examining poverty mobility in the United States based on monthly incomes. The proportion of those who are poor in two or more months is much greater than the poverty rate based on annual income, so the experience of poverty is more common than is suggested by the official poverty rate, which is based on annual figures. Similar background factors—belonging to a racial minority or living in a female-headed household—are associated with higher short-term, annual, and long-term poverty. Next, I examine poverty dynamics based on annual income over a long period of time in the United States, Canada, Germany, and the United Kingdom. There is considerable mobility into and out of poverty in all of these countries, so in each country a much higher fraction of the population is poor at least once during the period than is poor in any given year, and far fewer are poor across all of the years. Germany and the United Kingdom have lower rates of poverty persistence than Canada and the United States. In the fourth section, I analyze cross-national evidence on the extent of intergenerational income persistence. Recent research has shown that intergenerational persistence is higher than previously thought, and higher in the United States than in several other developed countries. Part of the reason for the high level of intergenerational income persistence in the United States is the income disadvantage of African Americans. Despite increases...

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