View Research by Author - Seth Zimmerman

Citation URL: http://www.urban.org/SethZimmerman

This report explores how Americans have moved up and down the income ladder over the last two decades, and whether it has been more difficult for Americans to get and stay ahead in the last decade. The report focuses on intragenerational mobility: how individuals change economic positions within their own lifetimes.

Using PSID data from 1968 to 2005, we find that the volatility of family income has increased over time (a trend that is robust to a large variety of modeling choices) but the trend in individual income volatility is less clear. Measurement error cannot fully account for these facts, but the increasing covariance of individual incomes within the family (driven by increases in the correlation of head and spouse earnings, due largely to the increased proportion of families with two earners) can.

Public concern about economic insecurity has increased markedly over the last several decades. This paper assesses the extent to which this increase in concern has in fact coincided with increased risk to family income. Using data from the Panel Study of Income Dynamics, we examine changes in two indicators of income risk-the short-term variability (volatility) of family income, and the association between large income drops and destabilizing life events-over the 1970-2004 period. Our findings support the hypothesis that income risk has increased: the volatility of family income nearly doubled over the period, and destabilizing events became increasingly associated with large income drops.

By allowing businesses to look internationally for efficient solutions, globalization may raise overall productivity and allow for widespread increases in living standards. However, critics have observed that globalization often pushes less- skilled U.S. workers into damaging competition with lower- paid foreign substitutes. This review describes the growing body of research on the impacts of globalization on U.S. workers, and explores the potential mobility consequences of this emerging trend. (Review 5 of 11.)

America offers opportunities for many immigrants to improve their earnings relative to what they could earn in their countries of origin, and research suggests that immigrants’ children tend to experience further economic gains. But the effect of immigrant workers on the earnings of low-skilled, native born workers may be significantly negative; some find that the recent influx of low-skilled, immigrant labor makes it more difficult for low-skilled native-born workers to gain higher wages. This review summarizes the highly charged debate over the positive and negative effects of immigration on economic mobility. (Review 7 of 11.)

Labor market institutions like unions and minimum wage laws represent some of the most direct levers available to a policymaker with a mobility-focused agenda. Both have the potential to increase absolute mobility by ensuring that lower- and middle-income workers receive a slice of the economic pie. At the same time, however, unions and minimum wage laws can lead to labor market rigidities that make it more difficult for people to move up the economic ladder. This review summarizes the complex and controversial research on the tradeoffs inherent in changes in minimum wage laws and unionization levels. (Review 8 of 11.)

Federal and state spending on work supports for low-income families grew between 2002 and 2005, with Medicaid accounting for most of the spending growth. After 2002 states spent less on child care, and federal EITC spending declined slightly as the number of employed parents decreased. Yet, food stamp spending increased as family incomes declined and program changes expanded eligibility and participation. The weaker economy also explained a large share of the increase in Medicaid spending. Differences in the design of programs and needs among families led to wide variation in the amount of support received by families across states.

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