Connecting Inequality and Intergenerational Mobility: Looking Ahead, Not Behind

ABSTRACT : Most research on US intergenerational mobility (IGM) starts with an origin measure of SES in the parents' generation (e.g. those parents who were age 40 in 1960-1980) and then assesses the SES outcomes for their children when they reach a similar age. This process has limited use in establishing the connection between inequality and IGM as the children of these generations grew up in an era of relative equality, and the children who were born to higher inequality generations (say those born 1990-2005) have not yet grown up enough to assess adult SES and therefore IGM outcomes. In this paper, we reverse this process by asking what do we know about the steps needed to reaching the middle class (the 'American Dream') and how they have changed for youth as inequality has risen over the past 25 years. Based on this analysis, we argue that IGM and equality of opportunity have both decreased significantly in the USA over the past 25-30 years. And perhaps this is the biggest negative effect of rising inequality on our society.