Why rising relative mobility does not guarantee economic advancement

This paper studies how relative mobility, income growth, and inequality jointly shape absolute intergenerational mobility. The study draws on data from the National Longitudinal Survey of Youth 1979. Using a distributional framework, the analysis shows that absolute mobility depends on three factors: mean income growth, income inequality, and intergenerational rank persistence. Relative mobility is weakly related to mean parent–child income gaps but strongly related to higher income inequality. As a result, improvements in relative mobility often occur alongside rising income dispersion. These distributional changes can offset or reverse the benefits of income growth. Counterfactual and sensitivity analyses show that absolute mobility increases only when income growth effects are stronger than inequality effects. When inequality rises with mobility, absolute mobility stagnates or declines. These results explain why relative and absolute mobility may diverge and show that focusing only on growth or inequality gives an incomplete picture of intergenerational economic progress.