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Two studies by the U.S. Department of the Treasury (1992a, 1992b) examined income mobility using a panel that followed 14,351 taxpayers over the period from 1979-1988. (8)

The unusually high degree of mobility reported by this study resulted from several methodological features of the analysis. (9) When the second Treasury study followed the Sawhill-Condon methodology by limiting the sample to taxpayers age 25-64 and comparing taxpayers within the panel rather than all taxpayers, the Treasury data showed that 50 percent of the lowest income quintile had moved to a higher quintile after 10 years.

Thus, the results were similar to those of Sawhill and Condon when a similar methodology was used. Using an extended version of the panel, Carroll, Joulfaian, and Rider (2006) found that 54 percent of taxpayers age 30-44 and in the lowest quintile in 1979 had moved to a higher quintile by 1995, while 47 percent of those in the top quintile had moved down. When they subdivided the period into five or eight sub-periods, they found some evidence that mobility had declined in the later part of the period, although much of the decline seemed to reflect effects of the double-dip recession in the early 1980s.

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. (7) Sawhill and Condon (1992), for example, used the Panel Study of Income Dynamics (PSID) to examine the mobility of individuals between the ages of 25-54 for the periods 1967-1976 and 1977-1986 relative to others in their sample.  

Using a measure of mobility that compares a fixed group of households over time, they found that over 60 percent of individuals were in a different income quintile a decade later.

Downward mobility from the top quintile was experienced by 47 percent and 50 percent of individuals in the two periods, respectively.  A later study by McMurrer and Sawhill (1996b) concluded that mobility rates had remained unchanged during this 20-year period.

Several recent studies have used PSID data to examine relative income mobility in the 1970s, 1980s, and 1990s.

They concluded that relative mobility declined slightly in the 1990s as 40 percent of households remained in the same income quintile, as compared to 36 percent in the 1970s and 37 percent in the 1980s. (10) They also showed that the income gaps widened over this period, which would make mobility across quintiles more difficult, and could have accounted for the small decline in relative income mobility. (11) Also using PSID data, Acs and Zimmerman (2008) found that intra-generational mobility of cohorts of individuals aged 25-44 was similar over the periods 1984-1994 and 1994-2004. In each period, about 60 percent changed income quintiles relative to their peers and about 47 percent of those initially in the lowest income quintile rose to higher quintiles. Hungerford (2008) found that in both the 1980s and 1990s, 47 percent of those in the lowest income quintile had moved to a higher income quintile by the end of the decade, but concluded that overall mobility declined in the 1990s.