Public Finance, 2nd Edition

Social Mobility in the United States

Thomas Hungerford measured the amount of social mobility in the United

States by computing transition probability matrices over two 7-year time

periods, 1969 to 1976 and 1979 to 1986. He divided the population into ten

income categories each time. His results were essentially the same in the two

periods and tended to undercut the notion that the United States is the land

of equal opportunity. The transition matrices were much closer to the no-

circulation identity matrix than to the matrix of full circulation, despite the

fairly Wne gradation of the income categories. Most people stayed at or near

to their original position in the distribution over a 7-year period. The p

ij

declined sharply to very low levels at three or more deciles away from the

initial position, at all points in the distribution. Hungerford concludes that

there is not very much social mobility in the United StatesÐbad news for

process equity.

An oVsetting piece of good news in Hungerford's data relates to end-

results equity. Redistributional policies are not so quickly undermined by

social mobility when the degree of social mobility is small. After all, if the

transition probability matrix were the identity matrix, the redistribution

would stick forever. Hungerford's data suggest that a social-welfare-improv-

ing redistributional policy may retain much of its impact for a very long time.

26

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26

See T. Hungerford, ``U.S. Income Mobility in the Seventies and Eighties,'' Review of

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4. THE SOCIAL WELFARE FUNCTION IN POLICY ANALYSIS 143

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144 REFERENCES