WEALTH GENERATION - How to boost income mobility in the UK

In the first section, we discuss the different measurements of mobility and recent advances in the field of income m obility studies that attempt to connect freedom to income mobility. [...] The usefulness of the data is that there is a single unified methodology for the whole of the United States. [...] This eliminates the issue of international comparability.6 The measure of absolute mobility in those data is defined as the ‘average income percentile rank in adulthood of children [born between 1978 and 1983] who grew up in that county with parents at the 25th percentile of the national parental household income distribution’ (Chetty et al. [...] Their econometric results suggest that a person who grew up in the 25th percentile of the income distribution but in the top quartile of the economic freedom distribution enjoyed 5% greater (i.e., upward) relative income mobility and 12% greater absolute income mobility than a person who grew up in the bottom quartile of the economic freedom distribution. [...] Going back to the level observed in the late 1990s in the United Kingdom – which would mean a halving of regulation – would be sufficient to bring income mobility up by between 0.8% and 3.13% – enough to fully match the level observed for the birth cohorts of the 1970s and 1960s.