Visualizing Income Inequality and Mobility Together

Abstract

Research and public conversations about income inequality and intergenerational mobility will benefit from a new approach that jointly visualizes these two measures. The new mobility table proposed addresses this concern by scaling each quintile by the spread of income it represents. Implications of this approach for future analyses of inequality and mobility are discussed.

Recent increases in economic inequality have raised concerns about whether rates of intergenerational income mobility will subsequently decline in the future. Some researchers have expressed fears that children raised in poorer families may find it more difficult to move up an economic ladder that has widening steps between top and bottom, while children raised in richer families may find their places at the top of the ladder more secure (Chetty et al. 2017; Haskins, Isaacs, and Sawhill 2008; Reeves 2017). While the actual relationship between inequality and mobility is less clear, the tools sociologists and other social scientists use to describe them have complicated understandings of their association. Our research and public conversations about inequality and mobility will benefit from a new approach that jointly visualizes these two measures.

The revised mobility visualization proposed here is described using the data set introduced by Chetty et al. (2014); the data set is publicly available from Opportunity Insights (https://opportunityinsights.org). To examine income inequality, researchers have traditionally produced images such as density plots showing skewed distributions (see Figure 1 for examples). To examine intergenerational mobility, a classic tool has been a mobility table, with parents’ quintiles in the rows and children’s quintiles in the columns (see Figure 2) (Torche 2015). In this example, the proportions give the probabilities that children born in the early 1980s and raised in each quintile of parents’ family income will end up in each quintile of the distribution of children’s family income in their early 30s, with quintiles ordered from lowest (1) to highest (5). The diagonal cells show the proportion of children “stuck” in the same quintile as their parents. Cells above the diagonal show the proportion of children experiencing upward mobility, and cells below the diagonal capture downward mobility.

Figure 1.

Distributions of parents’ family incomes and children’s family incomes. Values are top coded at the 99th percentiles. Data are from Chetty et al. (2014), online data Table 2, available at https://opportunityinsights.org.

Figure 2.

Intergenerational mobility table. Data are from Chetty et al. (2014), online data Table 1, available at https://opportunityinsights.org.

If our concern is how inequality and mobility relate to each other, the income distribution plots and the mobility table are too distinct. The problem is exacerbated by how the traditional mobility table asserts an equal distance between each quintile that completely flattens inequality. Other attempts at linking these two measures—Corak’s (2013) “Great Gatsby Curve” being the most well known—are better at comparing across countries than within countries.

A revised mobility visualization can address these limitations by scaling each quintile by the spread of income it represents. In Figure 3, the height and width of each cell reflect the skewed income distributions of parents and children. We can also see how the gaps between each subsequent quintile widen in both distributions. In this example, the minimum values for both distributions are zero, and the maximum values for both distributions represent the dollar cutoffs for the 99th percentiles. Including the dollar cutoffs for the top percentiles ($1,408,000 for parents; $408,400 for children) results in a scaling that makes it difficult to interpret most of the other cells. The transition probabilities, however, include all percentiles. The colors map onto the same proportions from the classic mobility table in Figure 2, with the palette chosen to draw attention to the contrast between the higher proportions in the top left and bottom right cells and the lower proportions in the top right and bottom left cells.

Figure 3.

Scaled mobility table. Cell heights and widths are scaled for the dollar ranges in each quintile. The minimum values used for scaling are zero, and the maximum values used for scaling are the 99th percentiles of the respective distributions. Data are from Chetty et al. (2014), online data Tables 1 and 2, available at https://opportunityinsights.org.

Where the classic mobility table limited the analysis to a discussion of the probability that children raised in each quintile will end up in each quintile as adults, this visualization captures how different the incomes in each quintile actually are. In short, the classic mobility table showed how placement in the income distribution is reproduced while this new table shows how inequality in the income distribution is reproduced. This new mobility table can expand possibilities for future research on the intergenerational transmission of income. For example, comparing the shapes of a visualization like this over time or across countries could reveal how the associations between inequality and mobility have evolved. This approach may similarly highlight implications for policy analysis. Indeed, the widening gaps between quintiles show precisely how much farther some individuals have to move to reach the upper quintiles associated with improved life chances (Reeves 2017). At the same time, this visualization demonstrates why efforts to increase upward mobility should not be considered without acknowledging the importance of reducing unequal outcomes. Opportunities for some individuals from the bottom quintiles to move to the top can drastically improve their individual conditions, but when moving to the top is associated with pulling so far from everyone else, we must reassess whether promoting mobility without simultaneously reducing inequality should remain a social and educational priority. Those reassessments can begin with visualizations that better integrate inequality and mobility to deepen our understanding of the relationship between them.