Indicator: Economic mobility
Definition
Individuals reach the level of earnings needed to enter the fourth income quintile or above.
RECOMMENDED METRIC(S)
Percentage of graduates who reach the level of earnings needed to enter the fourth (60th to 80th percentile) income quintile in their state or above one, three, five, 10, and 15 years after completing their highest degree or leaving education (high school or postsecondary)
Or, percentage of individuals who come from families in the bottom income quintile and reach the top quintile as adults
Type(s) of Data Needed
Administrative dataWhy it matters
Upward mobility is an important dimension of equitable opportunity and a central feature of an inclusive economy. In an equitable society, individuals should be able to access opportunities that allow them to be economically mobile despite their social class of origin. Based on earnings data for graduates from postsecondary institutions, students at approximately two-thirds of four-year institutions—both public and private—achieve economic mobility as defined by our first proposed metric, that is, they earn enough to enter the fourth income quintile (or higher) 10 years after completing their highest degree. Students who attended public two-year institutions are significantly less likely to meet economic mobility thresholds than those who attended four-year colleges.
An alternative way to measure economic mobility focuses on intergenerational mobility, comparing household income levels during childhood to income levels in adulthood. Rates of intergenerational upward mobility are lower for Black and Indigenous individuals compared to White and Latino individuals, and even among families that were not low income a generation ago, there are barriers to achieving a high level of earnings today, especially for people of color. However, research shows that racial disparities in rates of upward mobility are shrinking over time, while gaps based on socioeconomic status are increasing. As of 2024, income gaps for White children born to low-income families versus White children born to high-income families have grown by 28% in the last 15 years.
What to know about measurement
We recommend two metrics for this indicator, both of which have advantages and drawbacks. Measuring the first recommended metric—percentage of graduates who reach the level of earnings needed to enter the fourth income quintile in their state or above after completing their highest degree or leaving education—would require linking data from the K–12, postsecondary, and workforce sectors. To calculate this metric, institutions could track the earnings of their students or state data system records on individuals’ earnings could be linked with their educational records. Then, institutions or data systems would need to determine whether those earnings fall above the designated threshold. These thresholds can be determined using quintiles of earnings in the state where the individual resides. Alternatively, the threshold could be based on the state where the institution is located; however, this approach might be less relevant in locations where a high share of graduates move out of the state. This proposed metric focuses on whether individuals reach certain earnings thresholds, regardless of their parents’ economic status, drawing on work by the Postsecondary Value Commission.
We acknowledge that much of the literature on economic mobility defines it as intergenerational. Therefore, our second recommended metric—a measure of whether children from households with low incomes move to the top income quintile as adults—captures intergenerational mobility and is based on research by Raj Chetty and colleagues that has shaped the national conversation around what it means to be economically mobile. This metric could be constructed by state data systems using administrative data on adults’ earnings linked with data on their families’ earnings when they were children. Alternatively, institutions could calculate this metric by surveying students or graduates about their current earnings versus their families’ previous earnings.
E-W Case Studies
Source frameworks
This indicator appeared in three source frameworks reviewed for this report. Our proposed measures align with work by the Postsecondary Value Commission and Opportunity Insights.
References
The framework's recommendations are based on syntheses of existing research. Please see the framework report for a list of works cited.