The canonical method for calculating relative mobility pioneered by Solon 1999. In this method, a measure of relative mobility is calculated by regressing the log of child income on the log of parent income; it is a measure of relative mobility when comparing the difference in outcomes for children from high and low income parents.
In the equation: 
- PXY = Corr(logXi, logYi) is the correlation between log childincome and parent income and
- SD() denotes the standard deviation.


University of Texas at Austin

Relative mobility is the difference in mobility between children from high earning households and children from low earning households. Relative mobility asks, "what are the outcomes of children from low-income families relative to those of children from high income families?" 

Relative Mobility

Chetty, R., Hendren, N., Kline, P., & Saez, E. (2014). Where is the land of opportunity? The geography of intergenerational mobility in the United States. The Quarterly Journal of Economics, 129(4), 1553-1623.

Where is the land of opportunity? The geography of intergenerational mobility in the United States.

In the United States, relative mobility is: 
- correlated robustly with teenage birthrates and college attendence rates. 
- roughly half that of both Canada and Denmark.
- generally associated with better outcomes for children from poor families
- within the country, highest in the Great Plains region and lowest in the Southeast US.

Relative Mobility in the US

Relative Mobility Method: Intergenerational Elasticity of Income 

An alternative method for calculating relative mobility inspired by Dahl and DeLeire (2008) and first used by Chetty et al (2014). In this method, Let Ri denote child i’s percentile rank in the income distribution of children and Pi denote parent i’s percentile rank in the income distribution of parents. Regressing the child’s rank Ri on his parents’ rank Pi yields a regression coefficientpPR = Corr(Pi,Ri), which we call the rank-rank slope. The rank-rank slopePR measures the association between a child’s position in the income distribution and his parents’ position in the distribution. When compared against intergenerational elasticity of income, the Rank-Rank Slope method has been  lauded for being more statistically robust. 

Learn Before

Related