# Review of evidence for high-income countries

Tracking socio-economic mobility and inequality across space and time, and building an understanding of where, how, and for whom observed differences have occurred, is both important and challenging. The extensive 2022 NBER conference volume by Raj Chetty and four-co-editors – featuring contributions by many of the world’s leading researchers on income and wealth distributions – is a collection of carefully executed empirical studies that do exactly that, drawing on a wealth of data across countries in the developed world (Chetty et al 2022). These efforts have yielded an overwhelming amount of empirical evidence – some new, others refining, expanding, and consolidating what others have previously reported – the most striking and consequential of which is that both income and wealth inequality are increasing, and intergenerational mobility is declining, at least across most high-income countries.

A wide array of detailed findings supporting and extending these key conclusions are presented across the Introduction and 23 substantive chapters that comprise _Measuring Distribution and Mobility of Income and Wealth_ (hereafter MDMIW); the chapters, in turn, are structured around five themes: Income Inequality, Wealth Inequality, Income and Wealth Mobility, Mitigating Inequality, and Distributional National Accounts. In the process of unpacking these themes, readers are taken on detailed descents into datasets across various high-income countries (mostly from the United States and Europe) on labor and housing markets, earnings and consumption, and inheritance, administrative, tax, and national accounts data. Apparent anomalies and necessary qualifiers are noted along the way, but by the end it’s abundantly clear that, no matter how one analyzes any of the comprehensive datasets, the early 21<sup>st</sup> century has only exacerbated the enduring “worlds of difference” (Alesina and Glaeser, 2004) experienced by the rich and poor in otherwise prosperous countries.

A risk in focusing so intensely on the scale and sophistication of measurement issues, however, is that it leaves vastly less room for broader but important considerations as to why we should care about rising inequality and falling mobility. There are obvious moral reasons for why one might care about inequality, socio-economic mobility, and the basis on which wealth is accumulated: because it denies people opportunities to find and develop their talents, because it reduces their happiness, because we have prior values (some enshrined in long-standing international declarations) affirming the equal moral worth of all human beings, because the gains to some may have been ill-gotten and the losses to others a result of overt discrimination or outright theft. But are there also sound economic reasons? The opening paragraph of the introduction makes a strong case that the answer is resoundingly ‘yes’. From the outset, the editors of MDMIW ask us to consider the question of whether individuals are locked in their respective initial place in this distribution or whether there is the broadly shared possibility for mobility. Research has focused not only on measuring inequality and mobility but also on understanding its historical, economic, and social determinants, and on how policies might affect these distributions. In addition, it is now 2