Policy implications of new data on income mobility

The existence of income mobility may moderate concerns about growing inequa lities, especially if income mobility has increased. However, the evidence for rising mobility is equivocal, and its extent is not enough to offset th e growth of cross-sectional inequality. There is a case for seater concern for, and different policies towards, those persistently or recurrently poor than those only temporarily poor, but the data analysed here suggest that the bulk of low income observations come from the first two categories. Ana lysis of income mobility may help understand why people's incomes follow di fferent trajectories and how policy might affect this.