From Steve Sailer's review of Gregory Clark's new book, The Son Also Rises (which I have not read but might):
Economists [...] assumed that social mobility multiplies at the same rate with each new generation. If the correlation coefficient [...] of income between father and son is 0.4, then between grandfather and son it was imagined to be 0.4 squared or 0.16. Instead, it’s somewhat higher (0.26 in one study) due to regression toward the mean [...]. If a rich man has a son of only average income, his grandson is likely to earn somewhat above average.
This doesn't seem like such an advanced insight to come up with, so one might think that someone should have thought of it long ago and convinced all the others.
But then, it is not that surprising. Mainstream economics is a blank-slate science, as is the other discipline studying intergenerational mobility, sociology. To paint with a broad brush, the two differ in the timing of the influences they deem important. Standard economics sees everybody as basically the same, but subject to different opportunities and restrictions in a given situation. In contrast, sociologists typically think that people enter situations exhibiting vast differences, which result from social influences from birth onwards. Neither considers that large and important differences may already exist at birth (Hence, how could regression to the mean be important? What mean?).
This assumption has been known to be wrong for decades. Clinging to it causes all kinds of problems. Perhaps the main symptom of this in sociology is researchers' tendency to view a host of things as exogenous which are, in fact, endogenous. Such as, oh, socioeconomic status, the discipline's favourite variable. Once you realize there may be an endogenous component to status, you'll start doing lots of eyerolling when reading sociology journals. After a while, eyeache sets in.