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What is Income Mobility?

Ken Black
Ken Black

Income mobility is the movement of an individual or group from one income level to another. That income scale is somewhat arbitrary, but is usually set in quintiles, or fifths. In other words, the groups will be divided into percentages, such as the upper 20 percent, lower 20 percent, and three other divisions in between. Income mobility is measured in terms of upward mobility and downward mobility

The main benefit of income mobility is as a measure of economic opportunity and economic health in a country. In cases where upward mobility is seen, it could be the result of the economic policies in place, along with the aids available for those at the lower income levels. Due to the fact that income mobility is based on percentages, there will always be some moving upward and some moving downward.

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The U.S. government, along with other governments across the globe, look very closely at income mobility data. Such information is not considered one of the leading economic indicators, simply because it is not available at regular intervals, it is still a key point of analysis. The most reliable information comes from comparing data in a census. However, many countries, such as the United States, only conduct a comprehensive census once in a decade.

Those countries who find they experience a great deal of stability in income mobility often reassess what they are doing to see if things can be done differently. Those who are constantly in the bottom quintile may need a little more help. This may come in the way of job training and further educational opportunities. Countries that invest in such programs may find they are able to offer better upward income mobility for the citizenry.

Income mobility is often used interchangeably with social mobility. While the two are certainly linked, they constitute two slightly different things. Social mobility refers to a social status. Those who earn incomes often move up in social status, but some may decide not to upgrade their lifestyles. In those cases, the social status and income status may not necessarily be linked.

In the United States, there has historically been more mobility at the lower levels, than the upper levels. In fact, there are those that move from the bottom quintile to the top quintile within the time period of a decade. Those at the very top of the list, meaning the upper echelon of the top quintile hardly every stay there. In fact, only a very small percentage maintain the income levels needed for that position, though they may still remain in that upper quintile, just not as high as they used to be.

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