Archive for May 29th, 2014

May 29, 2014

Economic ‘mobility has not changed appreciably since the 1970s’

by Grace

Children growing up in America today are just as likely — no more, no less — to climb the economic ladder as children born more than a half-century ago ….

That’s the conclusion of The Equality of Opportunity Project, led by Harvard’s Raj Chetty.

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….

Incorporating results from a previous study dating back to the 1950s, the authors concluded that “measures of social mobility have remained remarkably stable over the second half of the twentieth century in the United States.”…

INCOME MOBILITY OVER TIME

20130527.COCIncomeMobilityOverTime2

This figure plots the difference in average income percentiles for children born to low vs. high-income parents in each year from 1971-1993. On average, children from the poorest families grow up to be 30 percentiles lower in the income distribution than children from the richest families, a gap that has been stable over time. For children born after 1986, estimates are predictions based on college attendance rates.

The effects of government intervention remain a subject for debate.

David Autor, an MIT economist who writes frequently about issues related to inequality, called the findings “a sort of Rorschach” test that will support many economists’ preconceived notions about the effectiveness of government programs in providing opportunity.

Some could view the results as a failure of programs such as Pell grants, Head Start and nutritional supplements for children that are intended to promote mobility. Or, he said, “you can view this as: Social policies have fought market forces to a draw.”

Fathers seem to matter.

 “The fraction of children living in single-parent households is the strongest correlate of upward income mobility” among all the variables the research team explored.

Cognitive skills also seem very important.

87 percent of poor smart kids escape poverty

… 87% of children with the highest level of cognitive skills who grow up in the lowest income quintile move out of that quintile by adulthood.

Although income mobility has not changed much, in many ways living standards for poor people have improved.

Bill Gates:  ‘Poor people far better off today than they were in the past.’

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Jim Tankersley, “Economic mobility hasn’t changed in a half-century in America”, Washington Post, January 22, 2014.

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