Study: Economic Mobility Hasn't Changed over Decades

By Tankersley, Jim | Pittsburgh Post-Gazette (Pittsburgh, PA), January 23, 2014 | Go to article overview

Study: Economic Mobility Hasn't Changed over Decades


Tankersley, Jim, Pittsburgh Post-Gazette (Pittsburgh, PA)


WASHINGTON -- Children growing up in America today are as just as likely -- no more, no less -- to climb the economic ladder as children who were born more than a half-century ago, a team of economists reported today.

Even though social movements have delivered better career opportunities for women and minorities, and government grants have made college more accessible, one thing has stayed constant: If you are growing up poor today, you appear to have the same odds of staying poor in adulthood that your grandparents did.

The landmark new study, from a group led by Harvard University's Raj Chetty, suggests that any advances in opportunity provided by expanded social programs have been offset by other changes in economic conditions. Increased trade and advanced technology, for instance, have closed off traditional sources of middle-income jobs.

The findings also suggest that who your parents are and how much they earn is more consequential for American youths today than ever before. That's because the difference between the bottom and the top of the economic ladder has grown much more stark, but climbing the ladder hasn't gotten any easier.

Those findings add up to a surprising take on the status of the iconic American Dream, and they cast Washington's roiling debate about the consequences of economic inequality in a new light.

The paper suggests that "it is not true that mobility itself is getting lower," said Harvard economist Lawrence Katz, a mobility scholar who was not one of the paper's authors but has reviewed the findings. "What's really changed is the consequences of it. Because there's so much inequality, people born near the bottom tend to stay near the bottom, and that's much more consequential than it was 50 years ago."

Americans have always placed great faith in economic mobility, the idea that any child born into poverty can grow up to be middle class, or that a middle-class kid can grow up to be rich.

As the nation struggles through the slow recovery from recession and decades of middle-class stagnation, politicians including President Barack Obama and Rep. Paul Ryan, R-Wis., have lamented that mobility is getting worse; that it is getting harder to climb out of poverty or into wealth.

Previous research has suggested that might be true, particularly work by Bhash Mazumder, a senior economist at the Federal Reserve Bank of Chicago, who found mobility declined as inequality increased in the 1980s.

Mr. Chetty and his colleagues -- Nathaniel Hendren of Harvard, Patrick Kline and Emmanuel Saez of the University of California at Berkeley and Nicholas Turner of the Treasury Department's Office of Tax Analysis -- examined millions of anonymous earnings records and found that mobility has not changed appreciably since the 1970s. (The authors looked at records for parents at a set age and for their children once they reached adulthood. For the most recent generation of children, many of whom have not yet started working, they measured college attendance, which correlates with higher earnings. …

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