Upward Earnings Mobility in Hong Kong: Policy Implications Based on a Census Data Narrative

Abstract

AbstractUsing census data spanning several decades, this paper offers a new and intuitive approach to understanding earnings mobility. We use “mobility ratios” and “immobility ratios” as indicators of the speed of upward mobility at the top end (i.e. moving into the ranks of the well-off) and the bottom end of the income distribution (i.e. moving out of poverty) as each cohort ages. We demonstrate that in Hong Kong, relative income upward mobility did slow down considerably for those born 1976–1980 and after. The 1976–1980 cohort is a watershed, prior to which upward mobility was generally robust and after which upward mobility was significantly subdued. The later cohorts generally start off with a much lower percentage that is well-off and a much higher percentage that is poor. Given such a low base, the apparent existence of upward mobility is not much solace for the majority as many are stuck in poverty. The prospect of slower economic growth in the coming decade suggests that it is unlikely that their lifetime fortunes will be better than those of older cohorts.