As Income Inequality Grows, Some Movement at the Top and Bottom

A recent Fed report examines the income of families in 2007 and the same families in 2009, distributed in 20 percent brackets. According to the report, 69.4 percent of those in the lowest income bracket in 2007 were also in the lowest bracket two years later; 19.1 percent rose to the second quintile, 6.7 to the middle, 3 percent to the fourth and 1.9 percent went from the bottom bracket all the way to the top bracket.

Conversely, 75.1 percent of those in the top quintile remained in the top quintile, but 17.8 percent fell one bracket, 4 percent fell two brackets, 2 percent fell three brackets and 1.1 percent went from the top quintile to the bottom quintile in just two years.

In a footnote, the Fed study breaks out the top 10 percent of families in 2007 and 2009. It says that 71.4 percent were in that bracket in both years; 17.2 percent fell to the 80th to 90th percentile from the 90th to 100th percentile – that is, from the top half of the top quintile to the bottom half. Only 11.4 percent of those in the top 10 percent fell into the bottom 80 percent of families. This suggests that income mobility at the top end may not be quite as high as the table implies…

Link:
http://economix.blogs.nytimes.com/2012/06/19/as-income-inequality-grows-some-movement-at-the-top-and-bottom/?pagemode=print&pagewanted=print