Ups and Downs: Does the American Economy Still Promote Upward Mobility?
Focusing on the household incomes of working-age adults (those aged 26 to 59), this report assesses how income drops, gains, and recovery have varied from 1967 through 2004. The analyses include both short- and longer-term fluctuations in income, examining how people are able to recover from income declines, how long their recovery takes, and differences across demographic groups in both.
The report finds that the economy does promote upward mobility over two- and ten-year periods just as well as it has in the past; Americans are not more likely to experience income drops than before, and they recover from those drops at similar rates. However, Americans who experience a ten-year income decline of more than 25 percent only have a fifty-fifty chance of recovering in the subsequent ten years. They also have a tough time keeping up with their peers; in the ten years after the loss, their incomes are 39 percent lower than the incomes of all adults. The evidence implies that in the current downturn, more people will experience large short-term income losses than large gains. While most will eventually recover, some will fall permanently behind.
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(JUNE 2009)
- Figure 1: Share of Population Experiencing Two-year Gains or Losses of More Than 25%
- Figure 2: Share of Population with Two-Year Income Losses
- Figure 3: Share of Population with Two-Year Income Gains
- Figure 4: Share of Population Experiencing Two-Year Gains or Losses of 5% or More
- Figure 5: Share of Population with Large Income Losses or Gains Over Two Years, by Demographic Group
- Figure 6: Recovery Time from Income Loss, 1969-2004
- Figure 7: Percent with Ten-Year Income Losses or Gains Following a One-Year Loss or Gain
- Figure 8: Recovery Time from Income Loss, 1995-2004, by Demographic Group
- Figure 9: Recovery Time From Income Loss, 1995-2004, by Sex and Household Composition Post-Drop
- Figure 10: Share of Population with Large Income Losses or Gains Over Ten Years, by Demographic Group
- Figure 11: Percent With Further Income Drops or Gains After a Large Loss or Gain in Previous Ten Years
- Figure 12: Adults Experiencing a Large Ten-Year Loss Fall Even Further Behind Their Peers in the Subsequent Ten Years
- Figure 13: Recovery Time from Income Loss, 1978-2004
- Figure 14: Recovery Time From Income Losses Over Ten Years, 1995-2004, bye Demographic Group
- Figure 15: Recovery Time From Income Losses Over Ten Years by Sex and Household Composition, 1995-2004
- Table 1: Distribution of Ten-Year Changes in Family Income, 1967-2004
