In 2004, John Edwards built his presidential campaign around the theme of “two Americas”: a small portion doing well while the rest struggled or fell behind. The language might be different in 2012, but many commentators continue to argue that the rich are getting richer while everybody else is falling farther behind. But as in 2004, many of these arguments overstate the conclusions that can be drawn from the underlying data. The details in this area matter a lot — especially today, because many policymakers believe income inequality is becoming a bigger issue, impeding economic mobility. They perceive just one solution: higher taxes and more wealth redistribution.

To be sure, income growth over the past few years has been modest to nonexistent as a result of the financial crisis, the subsequent recession and the tepid recovery. At a recent event sponsored by Economics21 and the Manhattan Institute, former White House economic adviser Jared Bernstein reviewed the status of the academic literature on income inequality and economic mobility. “There is not a lot of social science controlled experiment evidence linking inequality and opportunity,” he concluded, suggesting that the current connection between inequality and economic mobility “is correlational at best.”