Is Higher Income Inequality Associated with Lower Intergenerational Mobility?

A lot of our political debate boils down to questions about equality of outcomes versus equality of opportunity. But it turns out that they’re pretty closely related. Take a look at the chart below, which is from a terrific recent speech (with charts!) by Alan Krueger:

The horizontal axis shows the Gini coefficient, which is a summary of the degree of income inequality for each country. I think of this as a measure of inequality of outcomes. The United States sits out there on the right, which says that we have high inequality, which I bet that doesn’t surprise you.

Changing Youth Migration Patterns: So Long New York, Hello… Portland?

A new blog post from William H. Frey, senior fellow at the Brookings Institution, takes a look at the migration patterns of American youth, and the cities that attract the "cool" crowd. In the last few years, the rough economy has put the brakes on mobility, which has declined to its lowest levels since World War II. Young adults in particular have stopped moving around. Still, like always, there are those 20 and 30 somethings who remain mobile. But, in recent years their list of destinations has begun to change. Frey writes:

While young people are moving less than before, it is interesting to see where those who did move went. Heading the list are Denver, Houston, Dallas, Seattle, Austin, Washington D.C., and Portland. The top three areas and our nation’s capital, arguably, fared relatively well economically during the recession. But all seven are places where young people can feel connected and have attachments to colleges or universities among highly educated residents.

FREAK-est Links

This week, the European debt crisis explained with lego, why American mobility causes uniformity, a new way of cheating in college, why we make drunken mistakes, an interactive map of the history of war, and why pro athletes are giving themselves frost bite.

Mobility in the U.S. is Down. What's More of a Factor: the Housing Slump, or Air-Conditioning?

It's always been one of the supposed strengths of the American economy: the relative ease with which we're able to pick up and move. This is particularly useful when times are tough and you need to unhinge from a weak local economy. The thing is, mobility tends to sag during economic downturns. The entire 1930s marked a period of relatively low internal migration, just as the booming post-war decades saw a significant rise.

The conventional wisdom today is that mobility is being dragged down by the housing crisis, that people underwater on their mortgage or reluctant to sell their home into a soft market are choosing to stay put.

But a new study from Notre Dame economist Abigail Wozniak, along with two colleagues at the Federal Reserve, Raven Molloy and Christopher L. Smith, throws some water on that theory by showing that states with high percentages of homeowners with negative equity are no more likely than other states to see a decline in long-distance migration of their residents.