Thursday, July 12, 2012

Intergenerational economic mobility

Recently this topic has interested me a lot. I wonder how many studies have looked into this aspect in the Philippines. These figures from Economix are particularly instructive:

1) In terms of income, absolute mobility looks good...


...but relative mobility is less so. If there were perfect mobility, each of the components per column in the figure below would assume the same size. However, a disproportionate amount of the poorest children stay poor as adults (in the same way a lot of the rich remain rich in adulthood).


2) As for wealth, much fewer are able to exceed their parents' wealth in absolute terms...


...and relative mobility is just as bad as with income.


"Pew’s calculations are all based on the Panel Study of Income Dynamics, or P.S.I.D., a longitudinal data set that has followed families from 1968 to the present. The wealth numbers in particular are based on parents’ wealth in 1984 versus the mean of their children’s wealth as measured in 2001, 2003, 2005, 2007 and 2009."

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