Income mobility from circumstantial change versus from inherent change

A thought prompted by some material in Thomas Sowell's recent book Wealth, Poverty and Politics. He writes so prolifically that you always have to be careful to claim a book as being his most recent. If it's more than a few months old, it seems, there may be another more recently published.

Sowell is discussing the advocacy interest and concern about declines in income mobility in the US (and in the OECD more broadly). Income Mobility being measured in many different fashions but broadly trying to capture the capacity of children to move up or down the income quintiles compared to their parents. A society with very low income mobility would have most kids remaining in the income quintile of their parents, be that high or low. In a society with high income mobility, a child would have only a twenty percent chance of remaining in the income quintile into which they were born, all the rest moving up or down essentially randomly.

This is part of the advocacy/ideology aspect that is often hidden in the debate of income mobility. It assumes that outcomes are essentially a matter of chance and that therefore any child has an equal probability of being in any one of the five income quintiles.

Of course we know that that is not true but no one is willing to identify what the precise "natural" level of income mobility might be. We know that children of college educated, two income working parent households are highly likely to remain or rise in their income quintile compared to their parents on a probabilistic basis. In other words, at the level of the individual, there are no guarantees but at the level of the population, there are probabilistic/predictable trends.

The postmodern/critical theory ideologist try and ascribe this to better nutrition, better schooling, more test prepping, etc. They want the outcome to be the results of material advantage. Regrettably for their position, the actual evidence doesn't support that. Upper income children are less likely to use test prep services. High SES children in thinly populated areas where everyone uses the same public school, have similar life outcomes to those of their SES peers in rich urban areas where the highest quintile do attend expensive private schools.

Mobility is fraught with these issues of irreconcilability between empirical evidence and what the ideological wish to be the case.

What no one is contesting (or at least very few) is that income mobility has declined in all developed nations. After World War II there was an increase in income mobility till around circa 1980-2000 with declines since then. Perhaps this is a data quality and measurement bias issue. Could be, but I suspect not. I am guessing that the directional trend is real though the absolute numbers might be off.

Why?

I wonder if a different perspective might be that of societal sorting?

Prior to World War II nearly half the population lived in the country and a large majority were in country/small town. In other words, materially isolated from the ebbs and flows of civilizational life in the big cities.

Post World War II, 15 million servicemen saw the world, were extracted from their cloistered environments and tasked with developing skills based on their IQ (via the Army equivalent testing). They gained experiences, knowledge and skills. Some returned to the country and small towns but after the war there was a major increase in urbanization approaching the 80% of today. People now living in much more intense, complex and competitive urban environments which demand the most of their cognitive capabilities.

On top of that, pre-WWII we sent 5% to college and now we send 30% to college. To get into the best of those universities, you have to take IQ tests (SAT and ACT) which force a harsh ranking of potential.

On top of that, post-WWII we had first increased national sorting and then global sorting based on increased connectedness. The national highway system followed by containerization of shipping supplemented by digital telecom, the internet, smartphones, etc. In a highly integrated, competitive world, there is further sorting based on capability.

Military IQ sorting, followed by university IQ sorting followed by urban capability sorting, all in the space of thirty years.

I wonder if we didn't have a high degree of pre-WWII isolation (rural, bad roads, little communication, marginal sorting) followed by a high degree of post-WWII sorting (urbanization, global connectedness, IQ sorting in all facets of life, etc.) for thirty years. By circa 1980-2000, perhaps we had done most of the transitioning? People who, through isolation, might have been locked into isolation in lower quintiles, had burst those bonds and advanced into the upper quintiles warranted by their IQ/Behaviors/Capabilities. In that period we would have seen high income mobility as people moved between quintiles in a relentlessly growing national economy.

But after nearly two generations of sorting, perhaps people are roughly in the "right" quintiles reflective of their core capabilities. Sure there will be individuals moving up and down based on variance of circumstance, but perhaps the big shifts are passed. Given that IQ and critical pro-social, life enhancing behaviors are substantially heritable, if people have settled into their "proper" quintiles based on their capabilities, we would expect that future income mobility will indeed be lower than it has been in the past.

This raises the specter of unintended castes. We have in the past counted on income mobility to take the strain off of contextual societal stresses. In other words, if most people believed that there was the prospect of bettering their own lives or that of their children, there was likely some good flex in the system. If, after sixty years, people are reasonably settled in their prospective quintiles, it seems to me that the system becomes much more fragile. If that safety valve is done, then what?

If what I am speculating is true, then the only real solution is to find ways that enable people to change their own interior life circumstances more effectively than in the past. In the past, people could move from low opportunity environments (such as remote country) to high opportunity environments and improve their prospects, regardless of their native capabilities. Likewise with communication technology, logistical infrastructure, etc. If we have gotten most the benefit out of those aspects, then all that remains is changing/improving native capabilities.

A much harder task but one that probably has some potential, but only once we focus on it with clarity.