Evidence on income mobility

Today the Occupy Wall Street protestors were escorted off the premises.  Love em or loathe em, they have certainly brought attention to income inequality issues.  In an earlier post, I noted that social concerns about having significant amounts of income concentrated in the hands of the top 1% hinge on whether the same people are in the top 1% year in and year out. 

Carl Blalik, aka WSJ's "Numbers Guy" does his best to pin down the facts.  Blalik reports that of workers who were in the top 20% of earnings in 1996, 61% were in the top 20% in 2005.  Of those in the bottom 20% in 1996, 55% were still there in 2005.  Turning to the top 1% in 1996, 40.3% were still in the top 1% nine years later.  This suggests some fluidity in the far right tail of the income distribution.  However, those who leave the top 1% do not have much of a risk of falling very far down the income scale -- overall 86% remain in the top quintile.