Question

Problem 3

A) What evidence did Chetty and coauthors find about changes in absolute mobility in the United States over time?

B) How does the gender gap in absolute mobility rates vary by race?

Answer 1

Part A

The study conducted by Raj Chetty of Stanford University and his coauthors finds that there is a large decline in the economic mobility of the United States. The paper talking about the person earns more than his parents called absolute mobility is showing the declining trend. Their study mainly focused on the income of the people less than 30 years old and their parents. They found that absolute mobility in the United States Is between 84 to 98 per cent. The average worker in the US had earned more than 84 per cent of their parents. Also, they found that income growth is showing higher in the study period. The growth of income is rising with the equitable distribution in the united states. The strong income growth shows the rise in the mobility of the workers.

Part B

The racial differences are the essential feature of American society. The income of black Americans is much lower than that of non-Hispanic Americans. The racial disparity in income distribution is because of the intergeneration gap that is, the income of white and black children's income compared with their parent's income. In US society, the intergenerational difference in terms of income is very high. The possible explanation is that the black marry much lower than that of whites. It leads to lower rates of the household's income because the earning capacity is one rather than two in the families. In the case of black women, they word little more than that of white women, and they earn more household income. But the black men have lower wage rate and facing unemployment compared to white men. Also the problem for school dropout, college attendance rates and occupation has higher in black people than that of white.