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The fading American dream: Trends in absolute income mobility since 1940

1. Raj Chetty 1,*,
2. David Grusky 2,*,
3. Maximilian Hell 2,
4. Nathaniel Hendren 3,*,
5. Robert Manduca 4,
6. Jimmy Narang 5

1. ↵*Corresponding author. Email: chetty@stanford.edu (R.C.); grusky@stanford.edu (D.G.); nhendren@fas.harvard.edu (N.H.)

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Science 28 Apr 2017:
Vol. 356, Issue 6336, pp. 398-406
DOI: 10.1126/science.aal4617
Raj Chetty
Department of Economics, Stanford University, Stanford, CA, USA.

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David Grusky
Department of Sociology, Stanford University, Stanford, CA, USA.

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Maximilian Hell
Department of Sociology, Stanford University, Stanford, CA, USA.

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Nathaniel Hendren
Department of Economics, Harvard University, Cambridge, MA, USA.

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Robert Manduca
Department of Sociology, Harvard University, Cambridge, MA, USA.

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Jimmy Narang
Department of Economics, University of California, Berkeley, CA, USA.

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## Aspiring to do better than one's parents

The American dream promises that hard work and opportunity will lead to a better life. Although the specifics of what constitutes a better life vary from generation to generation, one constant is that children expect to do better—or at least to have a good chance at doing better—than their parents. Chetty et al. show that this dream did come true for children born in the middle of the 20th century, but only for half of children born in 1984 (see the Policy Forum by Katz and Krueger). A more even distribution of economic growth, rather than more growth, would allow more children to fulfill their dreams.

Science, this issue p. 398; see also p. 382

## Abstract

We estimated rates of “absolute income mobility”—the fraction of children who earn more than their parents—by combining data from U.S. Census and Current Population Survey cross sections with panel data from de-identified tax records. We found that rates of absolute mobility have fallen from approximately 90% for children born in 1940 to 50% for children born in the 1980s. Increasing Gross Domestic Product (GDP) growth rates alone cannot restore absolute mobility to the rates experienced by children born in the 1940s. However, distributing current GDP growth more equally across income groups as in the 1940 birth cohort would reverse more than 70% of the decline in mobility. These results imply that reviving the “American dream” of high rates of absolute mobility would require economic growth that is shared more broadly across the income distribution.

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### Science

Vol 356, Issue 6336
28 April 2017

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###
The fading American dream: Trends in absolute income mobility since 1940

By Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang

Science 28 Apr 2017 : 398-406

Only half of Americans see their dreams come true.

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