Income Mobility in the U.S. from 1996 to 2005, updated in 2014

The degree of mobility in the overall population and movement out of the bottom quintile in this study are similar to the findings of prior research on income mobility.

• There was considerable income mobility of individuals in the U.S. economy during the 1996 through 2005 period as over half of taxpayers moved to a different income quintile over this period.
• Roughly half of taxpayers who began in the bottom income quintile in 1996 moved
• Among those with the very highest incomes in 1996 – the top 1/100 of 1 percent
• only 25 percent remained in this group in 2005. Moreover, the median real income of these taxpayers declined over this period. </
• The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
• Economic growth resulted in rising incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups.

Previous research on income mobility over the past several decades has generally found that about half of those in the bottom quintile move to a higher quintile and also that more than half of households move to a different income quintile within about 10 years.

Report of the Department of Treasury, updated 2008 

 http://reason.com/archives/2014/06/04/income-mobility-myths