Labor income tends to lift individuals up the distribution — through life-cycle and human capital dynamics — while capital income, more volatile and concentrated, is often linked to downward shifts.

Key findings:

🔹 Measures of capital and labor mobility differ across metrics;

🔹 Upward mobility is mainly driven by labor income (and joint upward moves);

🔹 Downward mobility stems mostly from capital income (and joint downward moves).

We introduce a new framework that decomposes total income mobility into its labor and capital components across the life cycle — covering nearly 300,000 individuals.

ahahahahaha (still laughing)