Region: California
Report

We estimate rates of “absolute income mobility” – the fraction of children who earn more than their parents – by combining historical data from Census and CPS cross-sections with panel data for recent birth cohorts from de-identified tax records. Our approach overcomes the key data limitation that has hampered research on trends in intergenerational mobility: the lack of large panel datasets linking parents and children. We find that rates of absolute mobility have fallen from approximately 90%for children born in 1940 to 50% for children born in the 1980s. The result that absolute mobility has fallen sharply over the past half century is robust to the choice of price deflator, the definition of income, and accounting for taxes and transfers. In counterfactual simulations, we find that increasing GDP growth rates alone cannot restore absolute mobility to the rates experienced by children born in the 1940s. In contrast, changing the distribution of growth across income groups to the more equal distribution experienced by the 1940 birth cohort would reverse more than 70% of the decline in mobility. These results imply that reviving the “American Dream” of high rates of absolute mobility would require economic growth that is spread more broadly across the income distribution.     

News
Nov. 23, 2016
The latest new vehicle sales data from California New Car Dealers Association shows continued but slowing growth in California’s purchases of new cars and trucks.
Report
In February 2015, the Center completed a review of the many competing estimates of green jobs creation in California, entitled California Green Jobs: A Review of Current Estimates. As stated in that review, the policy interest in green jobs is not new to California.
News
Aug. 23, 2016
The latest new vehicle sales data from California New Car Dealers Association shows continued but slowing growth in California’s purchases of new cars and trucks.
Report
Many believe the current tax system does not serve California as well as it might, and that a review of the entire structure is long overdue. Post - Proposition 13 revenues from the sales and use tax, the corporation tax, and the property tax have diminished. This has increased California’s dependence on the personal income tax. The increasing volatility of the state’s economy (and the stock market) has translated into greater unpredictability of state tax revenue, presenting challenges for budget forecasts.
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