In Horatio Alger's famous story, “Ragged Dick”, a plucky boot shiner improves his lot through hard work, honesty and learning his “three Rs” (reading, ’riting and ’rithmetic). The marks of his success are a suit, an office job and a new name, “Richard Hunter, Esq”.

These days economists use more sophisticated gauges. They measure mobility over a lifetime (rags to riches, or the reverse), between generations (how children do relative to their parents), in absolute terms (whether children are richer or poorer than their parents) or in relative ones (whether children are higher or lower on the income ladder than their parents).

When countries are growing fast there is a lot of absolute upward economic mobility. In most emerging economies children almost invariably earn more than their parents. Even in America, despite slow growth and widening income gaps, most people do better than the generation above them: a recent study by the Pew Charitable Trusts found that 84% of adult Americans had higher real incomes than their parents. 

Read the full article at economist.com.