Study Reveals Potential for Upward Economic Mobility Varies Strongly by Location

Economists from Harvard University and the University of California Berkeley’s new study The Equality of Opportunity Project uncovers disparities among peoples’ relative abilities to rise to a higher income bracket across the United States. Released on July 22, this study is the first nationwide survey of upward economic mobility in the U.S. that contains enough data to enable comparisons between metropolitan areas. The study finds that residents of Salt Lake City have the most potential for upward income mobility among the 50 largest U.S. cities, with children growing up in the bottom fifth of incomes nationwide having an 11.5% chance of reaching the top fifth income bracket by the age of 30. Atlanta is the city with the least potential for income mobility, with children growing up in the bottom fifth only having a 4% chance of making it to the top fifth by age 30. Nationwide, the areas with the least upward mobility are clustered in the Southeast and the industrial Midwest, while in general the Northeast, Great Plains, and West experience greater mobility. Researchers used family income records to compare parents’ household income levels during their child’s teenage years (between 1996 and 2000) with the grown child’s household income at the age of 30 (measured in 2010 and 2011). The researchers first considered whether tax expenditures, such as the presence of tax credits for the poor, were affecting income mobility, but concluded that tax policy, while potentially accounting for some differences in income mobility, cannot fully account for the level of disparity that exists. Investigators researched other potential causes to understand the origins of observed variations in income mobility. Increased income mobility is most likely to exist in areas where poor residents are well integrated into neighborhoods rather than being isolated in areas of concentrated poverty and where income inequality is minimal. The presence of a large middle class appears to be a strong indicator of increased upward mobility, as is the availability of a high-quality K-12 school system. Family structure and social capital, measured by such factors as the prevalence of two-parent households and above-average participation in religious and civic organizations, also appear to facilitate increased income mobility. The researchers caution that though increased income mobility may correlate positively with the above factors, it is not necessarily a direct result of these factors being present. In addition, the study finds that those children who moved from low-mobility to high-mobility areas as small children fared, on average, almost as well as high-mobility area natives in terms of their ability to achieve upward income mobility. By contrast, those who moved from low- to high-mobility areas as teenagers were much less likely to achieve upward mobility by age 30. This confirms researchers’ hypothesis that geographical and demographic patterns of an area, rather than any innate characteristics of the area’s residents, determine mobility. The study also shows that for the wealthiest income brackets geographic location hardly matters, as wealthy children across the country have a strong chance of growing up to be wealthy adults. On a national level, one-third of 30-year-olds who grew up in the top 1% income bracket were making $100,000 in family income, compared with only 1/25 of 30-year-olds who grew up in the bottom half. The study calls for future research to help social scientists better understand how to increase income mobility in low-mobility areas.The Equality of Opportunity Project website contains additional project data available for download, a short summary of the project’s findings, and a map depicting intergenerational income mobility by county on a national level. Access The Equality of Opportunity Project webpage here: http://bit.ly/17xLodPAccess “In Climbing Income Ladders, Location Matters,” a discussion of the study results and interactive map from The New York Times, here: http://nyti.ms/15BlUL8