for those who follow, ” while president obama has described it as follows : “ a child ’ s course in life should be determined not by the zip code she ’ s born in, but by the strength of her work ethic and the scope of her dreams. ” one ’ s destination in life should not depend on where the journey begins. equal opportunity does not imply equal outcomes – some people may work harder, be more fortunate in terms of their disposition and endowments, or just be luckier in how their lives evolve. but it does require that income mobility – in particular, upward mobility – be widely evident and remain part of the fabric of the nation. it is important to keep in mind the distinction between income mobility and income inequality. income mobility is a dynamic concept – the degree to which individuals or families can move rajashri chakrabarti, andrew haughwout, giorgio topa, joseph tracy and wilbert van der klaauw assisted in preparing these remarks. bis central bankers ’ speeches up or down in the income distribution over time. income inequality is a static concept – how unequal are individual or family incomes at a particular point in time. recognizing that rising income inequality in the united states is an important issue, my focus today will be mainly on income mobility. i don ’ t think the issue of income mobility receives the attention it deserves. it is a foundational element for a well - functioning democratic society and provides evidence about the ability of an economy to provide opportunities for its citizens. a standard approach to measuring income mobility is to compare where a child is in the income distribution relative to where the parents were in the income distribution. a striking result is that intergenerational income mobility in the u. s. – a child ’ s chances of moving up in the income distribution relative to her parents – has remained stable over the past half century. however, because of the increase in income inequality, the consequences of being born to low - versus high - income parents are larger today than in the past. one explanation for the lack of a correlation between income inequality and income mobility in the u. s. is that income inequality is strongly influenced by the top one percent of the income distribution, but there is little correlation between income mobility and this top income percentile. 2 while income mobility in the united states has been relatively unchanged, it remains well below several other nations. according to stanford economist raj chetty, the probability of moving from the bottom quinti

( 2015 ), hellerstein et al. ( 2011 ), aslund et al. ( 2011 ). chetty et al. ( 2015 ). bis central bankers ’ speeches zoning can also be used to promote affordable housing – to include, rather than exclude lowand moderate - income families by setting aside space for those families in exchange for the right to develop market - rate units. this is a strategy that new york and other large cities have pursued for many years, and in these cities it is easy to point to units that were developed under the program. nonetheless, these programs are often controversial – some economists and others argue by increasing the cost of development they restrict supply. thus, while some percentage of new units developed will be affordable, fewer new units will be developed with uncertain effects on affordability overall. it ’ s perhaps informative to contrast this kind of program with one that has historically been the main mechanism by which the supply of affordable housing has increased. the program i have in mind here isn ’ t a housing program, but, in my view, it has extremely important effects on the housing market. i ’ m talking about intra - urban transportation, which can serve to dramatically increase the locations available for development, and thus promote the availability of affordable housing. 13 i believe that safe, reliable, affordable and efficient transportation to job locations should be a crucial element in an effective housing policy. such a program indisputably increases the supply of sites available for development, which is a key way to get the benefits of lower prices to a broader set of families. indeed, it is clear that cities ’ ability to grow and attract new residents requires them to either increase density – essentially meaning taller buildings – or to expand outwards by increasing transportation access. access to affordable credit is yet another pillar of a policy program that promotes housing affordability. we at the federal reserve have long worked to ensure that credit flows equitably and that financial services are available to all u. s. citizens. the fed ’ s research on these subjects ranges from the pioneering study of redlining by a team of boston fed economists, to a very recent new york fed study on “ banking deserts ” that appeared in our liberty street economics blog just last month, as well as ongoing community credit work. we understand the importance of credit in allowing communities to grow, and the importance of the community reinvestment act in requiring financial institutions to make investments in their communities. but, as my remarks here have indicated,