Most discussions about inequality get one thing wrong.
By Jurat Nortojiev · · 1 min read
The typical approach takes a snapshot of rich vs. poor in 1990, compares it to a snapshot from 2020.
And says "inequality has increased."
This misses the dynamic nature of people's lives because it's not tracking the same individuals over time.
The ergodic approach works more 'accurately'.
60% of people spend at least one year in the top 10% of earners.
15% spend at least one year in the top 1%.
Most people move up and down throughout their lives.
It's not the same people staying rich or poor.
This dynamic mobility is invisible when you only look at static snapshots.
But it changes how we should think about inequality and economic opportunity.