Mobility vs. Movement
Point of conceptual clarification. As far as I can tell, income mobility studies don’t actually study mobility in the sense of the ability to move. They study actual movement in incomes. Mobility is a dispositional term. If I have been immobilized, I am prevented from moving. If I am immobile, but not immobilized, then I could have moved, but didn’t. If I sit in my chair all day, my measured physical movement for the day will be low, but I may also be a spectacularly mobile person, able to run marathons, climb sheer rock faces, swim channels, etc. What we are interested in normatively from economic measures of mobility is whether there are structural barriers to upward movement, especially for the less wealthy, not the average deviation from parents’ earnings. Can people earn more if they try? Once the average income reaches a certain threshold of material comfort, we should expect people’s labor market choices to reflect preferences for many things other than income. So relatively low measured mobility (generation 2’s income highly correlated to generation 1’s) could indicate that people are fairly well satisfied with their parents’ level of income and are optimizing on other margins. The better off people become materially, the less you ought to expect actual measured intergenerational movement in average income to reliably indicate the opportunity to move.
I have an extraordinarily interesting job that probably pays about 1/3 of what I could get on the labor market doing (for me) much more boring things, and so here I am happily foregoing twice what I actually make not to be bored. (So: what are my really real wages?) It turns out that this choice keeps my income in the neighborhood of my Dad’s at my age, I’m guessing. (I, however, don’t have a wife and three kids to support!) I am incredibly grateful to be at liberty, both economically and socio-culturally, to make this kind of tradeoff between income and satisfaction. And I’m sure I’m not alone.
The opportunity to make this kind of tradeoff in the labor market is largely a function of education. I think our current system of public schooling does create a structural barrier to upward movement for many of the least well-off, which is why we should scrap that system and replace it with a market in education as a matter of justice. But that’s a matter of particular barriers to upward movement, which are what we should focus on, not some meaningless-by-itself average.
May 31st, 2007 09:39
This is true. Anecdote coming…
I could have made at least 1.25 to 1.5 the amount I make now if I had pursued the engineering specialty I was trained for in school. Even more if I decided to go to grad school. But I passed on the opportunity in order to pursue a possible indie rock career, which at the time was very plausible. Two things were necessary: remain in the same city, and acquire a well paying job that was flexible and ultimately disposable.
So I guess it is a story of opportunity costs. Although we had several label opportunities in the end the band just didn’t have what it takes. This is fine, I am in the process of changing courses, yet again, and will succeed I am sure, although I will never accumulate the amount of wealth my parents were able to. But it doesn’t matter because I was aware of the cost going in and was willing to pay it.
This is a very common theme I see all of the time, especially where I am from. Almost ever indie band coming out of Austin that you might have heard of (or might one day) comes from upper-middle to upper class families, and almost all have sacrificed college educations, or post graduate careers, in order to “make it”. Most of them wont, but that is not the point. It is the vast amount of wealth, opportunities, and mobility we have in this country that allow individuals to make these kinds of choices and trade-offs to begin with.
June 1st, 2007 03:22
I hear you, but have two things to say:
First, I think the general agreement is that there are barriers to people from low-income backgrounds becoming high-income people. Like, we can see those barriers in the real world. While admittedly, no measuring of income movement can really quantify income mobility, a) nothing else really can either unless you can control for how hard people try, and b) I think it’s generally believed that choosing to make less money is a smaller issue than the barriers to mobility. I mean, this choice theory implies that poor people are more likely to not work hard than rich people. You have a theory about why this might be (they satisfice with regard to income and choose their parent’s income as the ‘right’ level of income) but off hand, this seems like a pretty small cause of the difference. It sounds like both you and the other commenter are examples of relatively wealthy people who chose not to work hard: Surely this goes against your claim, which would imply that wealthy people try harder… What you need to prove your point is evidence that poor people start indie rock bands and become educated policy analysts, not rich ones.
Second, my general observation is that people from low-income backgrounds don’t know how to become wealthy. When my parents moved me from a private school in California to a public school in Idaho, I discovered that people in Idaho did not have a culture which valued education. The generic profile of the average Idahoan is of a person who attempts to work their way through Boise State University and fails to do so, dropping out before graduation. In general, parents refuse to put their children through college, which is seen as unnecessary. I met some very smart, very focused people in Idaho, but many were never encouraged to become educated. I guess what I’m saying is something like the generic critique of sociologists on economists: economists imagine that preferences are fixed, and thus the fact that some very smart people achieve nothing is either because of barriers, or because they didn’t want to. Sociologists say that preferences are socially determined. If people I knew had been told from the time they were small that their identity should be bound up in how they do at school, and were rewarded heavily for their progress, as I was, they would have chosen to invest much more heavily in education, and thus in their future income level. Thus, I do not see this as individuals freely choosing to live their parent’s lives, but individuals put in a position where they were incredibly unlikely to choose education, because no child values education unless they are rewarded for it in the short-term. I’m reminded of Thoreau’s “The mass of men lead lives of quiet desperation.” I think many people look back on their lives and regret that they did not work actively to improve their situation because, without even realizing it and because they lacked a broader perspective, they were conforming to a social norm that significantly harmed them.
June 1st, 2007 09:51
Will,
I agree and understand everything you wrote… except this sentence, which nerdbound expands upon in his comments about the culture in Idaho…
I’d agree with you, if you wrote it this way…
But I sense from your post and from nerbound’s comments that you both believe that education is function of an institution “educating” people like a high school or a university. I would argue that education is natural to all human beings and never stops. It is a natural progress happening constantly. I am educating myself every minute of everyday – for example – I just learned the difference between a physical and logical fail-over instance of the Oracle e-Business Suite and the strengths and limitations of each configuration. Now I have to use my mind to compare those strengths and limitations to our situation and decide which configuration is best. I don’t think I could stop learning if I tried… maybe in a jail cell.
I find this sentence by nerdbound dangerous…
Many people will never do well in mass schools systems for a variety of reasons. Having your identity “bound up” with your traditional educational performance, is exactly why so many poor people feel helpless and worthless, they’ve been told they are helpless and worthless unless they perform exactly the way our “educators/masters” tell them they must perform.
My self-esteem was trashed because it was “bound up” with “how I did in school.” It took me years to discover that I was far more capable than my traditional education would suggest.
IMHO, in many cases – not all – a degree or a diploma is an artificial way to create scarcity in an abundant marketplace, much like licensing is in other areas.
June 1st, 2007 16:15
What an interesting post and series of comments! I agree with much of what has been said. Only a few points to add:
- I agree with nerdbound that even if we could control for how much people want increased income, we’d still see similarly wide disparities. Consider how many poor people work multiple jobs. It is VERY doubtful that these people select these jobs because they value the job itself (plumbing, or custodial duties, or working as a security guard) or the particular working conditions (60 hour workweeks, let’s say) more than they value the duties of a higher paying job, or more than a job that would sustain them with fewer hours, or more than their leisure time. They do these jobs because they pay the bills.
I also agree that desires can be socially/environmentally determined. So if you ask a poor person if they want to be a policy analyst, they probably say “no” partly because it’s not even on their radar. More to the point, many poor people value money very highly but are not aiming to run a business someday or make $100,000 because they don’t think these are options. All of this is simply to say that you should be careful about some pitfalls if you are trying to measure someone’s desire to make money.
I doubt that a lack of actual movement from poor to rich is likely to indicate a lack of desire among poor people to have more money. Of course in some cases it does.
You may be able to get at this question by asking people “Would you be likely to take a job that pays $10,000 more than your current job but is not particularly interesting?” or similar things.