This brief describes how researchers can use state and federal tax data to assess social and economic mobility. When households file their taxes, they provide information on income from work, income from assets, tuition paid for education, marriage status, and other mobility information. Federal and state tax data are typically readily available in aggregated form, but individual-level data—especially data for those who have earned income but did not file a tax form—can be more difficult to access.

How have researchers used these data?

Researchers have primarily used federal tax data to characterize economic mobility, as state tax data are generally less available. Earlier papers, and those using aggregate data, tend to focus on the share of households that appear to move from one income group to another. Papers that use individual-level data have more flexibility to generate additional measures of mobility, such as generational changes in income, employment, and marriage.

What are these data’s limitations, and are there opportunities for increased use?

Tax data can support evidence-based policymaking, but full access to these data have been limited to just a few researchers. And there are few examples of external researchers using individual-level state tax data. Longitudinal, individual-level full federal and state tax data could support a wide range of economic mobility research. In particular, the links between parents and children in federal tax data, and the ability to capture income from investments and other contextual information, make federal tax data a near-unmatched source for research. Providing more access to federal data via a synthetic dataset, or direct access to the Statistics of Income Databank panel, could further economic and social mobility research.