Optimism about American opportunity may fade further as meritocracy comes under pressure from two sides: a growing economic divide between earned income and inherited wealth; and a growing social divide, marked by differences in family structure, education, and community.

In 1992, economist Paul Krugman, published this article in the Fall issue of The American Prospect. It's been republished in answer to conservative critics of Thomas Piketty's Capital in the Twenty-First Century .

Families, labor markets, and public policies all structure a child’s opportunities and determine the extent to which adult earnings are related to family background. Cross-country comparisons and the underlying trends suggest that these drivers will most likely lower the degree of intergenerational earnings mobility for the next generation of Americans coming of age in a more polarized labor market.

Data from a variety of sources contribute to this broad picture of strong growth and shared prosperity for the early postwar period, followed by slower growth and growing inequality since the 1970s. Within these broad trends, however, different data tell slightly different parts of the story.

Two studies by the authors find that: (1) Upward <a title="income mobility" href="http://obs.rc.fas.harvard.edu/chetty/mobility_geo.pdf">income mobility varies</a> substantially within the U.S. (2) Contrary to popular perception, <a title="mobility has not changed significantly" href="http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf%20">economic mobility has not changed significantly over time</a>; however, it is consistently lower in the U.S. than in most developed countries.