Which of the following statements is true of income mobility?
contributes to greater wealth inequalities in the United States
is less in the United States than in most developing nations
is the movement of individuals and households from one income quintile to another curve over time
makes lifetime income inequality among income receivers in the United States greater than income inequality in any single year
Of the choices given here, the best answer is the third. Income mobility can be defined as the movement of people and households from one income quintile to another over time. Income mobility, in other words, is a measure of how much it is possible to “get ahead” in a given country. It looks at which income quintile (top 20%, second 20%, and so on) a person is in at a given time. It then looks later to see whether that person is in a different quintile. The more that people move from one quintile to another, the more income mobility exists.
Therefore, the third answer is the best.