Determination of income mobility using tax return data

This research addresses the question of whether taxpayers were income mobil e during 1979-1990. Following prior research, the authors compare ranks of individuals in the sample distribution of income across years. Extending pr ior research, the question is asked: Does an individual draw his income fro m some fixed subset of the distribution of possible incomes, implying a lim ited income opportunity set, or from the total distribution of incomes, imp lying an unlimited income opportunity set? Group income distributions withi n each year are analyzed using stochastic dominance. The authors find limit ed income mobility over 1979-1990 and that individuals face a limited incom e opportunity set based on their group membership.