Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Middle-Out Mobility: Regions with Larger Middle Classes Have More Economic Mobility

Middle-Out Mobility: Regions with Larger Middle Classes Have More Economic Mobility

Ratings: (0)|Views: 22 |Likes:
Americans have long imagined our nation to be a land of equal opportunity, where anyone can succeed with talent and hard work. Unfortunately, economic mobility is a scarce commodity today, and a child’s life chances are too often dictated by his or her parent’s pocketbook.
Americans have long imagined our nation to be a land of equal opportunity, where anyone can succeed with talent and hard work. Unfortunately, economic mobility is a scarce commodity today, and a child’s life chances are too often dictated by his or her parent’s pocketbook.

More info:

Published by: Center for American Progress on Sep 03, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

09/10/2013

pdf

text

original

 
1Center or American Progress | Middle-Out Mobility: Regions with Larger Middle Classes Have More Economic Mobility
Middle-Out Mobility:
Regions with Larger Middle ClassesHave More Economic Mobility
By Ben Olinsky and Sasha Post September 4, 2013
 Areas wih large middle classes enjoy ar more economic mobiliy han areas wih smallmiddle classes. Consequenly, low-income children who grow up in regions wih largemiddle classes are likely o become more nancially successul han hose who do no.Tis nding provides powerul new evidence ha a srong middle class and economicopporuniy go hand in hand.Despie our pleniul poliical disagreemens, Americans share a common commimeno equaliy o opporuniy. Indeed, a remarkable 97 percen o Americans believe haevery person should have an equal opporuniy o ge ahead in lie.
1
 Ye over he pas ew decades, a child’s chance o succeeding in lie has become increas-ingly dependen on he circumsances ino which he or she is born. Children o low-income parens end o grow up o earn lower incomes hemselves, while children o auen parens end o remain auen. More han 4 in 10 children who sar a he botom say a he botom, and close o 4 in 10 children who sar a he op say a heop.
2
I we aspire o give every child he chance o achieve he American Dream, we musdo beter. We mus clearly undersand he deerminans o economic opporuniy andcra soluions ha will help o reignie i.Las monh, our economiss rom Harvard Universiy and he Universiy o Caliornia,Berkeley—Raj Chety,Nahaniel Hendren , Parick Kline, and Emmanuel Saez—madean imporan conribuion o his eor by releasing a comprehensive sudy o inergen-eraional income mobiliy across he Unied Saes.
3
Teir sudy revealed no only hamobiliy varies subsanially across meropolian areas and oher geographic regions, bu ha hese variaions are associaed wih a number o regional characerisics, suchas school qualiy, civic and religious engagemen, he share o single-paren amilies, andgeographic sprawl. In oher words, he variaion in economic mobiliy is no random.Some characerisics likely improve mobiliy, while ohers dampen i.
 
2Center or American Progress | Middle-Out Mobility: Regions with Larger Middle Classes Have More Economic Mobility
By using he same daa and mehodology employed by Chety and his colleagues, wecan see ha one o he mos imporan characerisics is he size o he regions middleclass.
4
Pu simply, he daa show ha when a region has a larger middle class, is low-income children are likely o be more upwardly mobile. Indeed, he size o a region’smiddle class is a sronger predicor o economic mobiliy han all bu 2 o he 28regional characerisics ha he sudy’s auhors esed.Tis nding—ha he middle class and mobiliy are srongly relaed—is very much inline wih recen research ha shows a negaive correlaion beween inergeneraionalmobiliy and economic inequaliy. Inernaional sudies have shown ha counries wihmore inequaliy have less economic mobiliy, a relaionship ermed he “Grea Gasby Curve” by Alan Krueger, he ormer chairman o Presiden Barack Obama’s Council o Economic Advisers.
5
Now we know, based on he sudy rom Chety and his co-auhors,ha his relaionship is rue righ here wihin he Unied Saes, no only across counries.For oo long, a srong middle class was believed o be merely he consequence o srong economic growh, no he oher way around. Furhermore, income inequaliy  was oen dismissed as a naural and harmless side eec o a purporedly equal-oppor-uniy economy. Bu increasingly, hose undersandings have been upended. A growing body o scholarship suggess ha a srong middle class can drive prosperiy while highinequaliy can hamper i.
6
 Te laes daa rom Chety and his colleagues add o his work by revealing ha hemiddle class and inequaliy are clearly linked wih mobiliy: Regions wih larger middleclasses and lower income inequaliy have higher mobiliy. By conras, heir ndingsundercu he key premise o “supply-side” economic heory by showing ha places where sae income axes are lower and less progressive acually have lower mobiliy.Tese ndings should have a dramaic impac on he debae over wheher and how oaddress ever-widening income dispariies and an ever-weakening middle class.
Declining opportunity
 Americans have long believed ha heir children would be beter o han hey were
7
;oday, only hal o all Americans hold his belie.
8
Tis growing pessimism is based oneconic shis in he American economy. In he decades ollowing World War II, he benes o robus economic growh were broadly shared. As a resul, rom he lae 1940so he early 1970s, amilies rom across he income specrum saw heir incomes grow anearly he same rae, roughly doubling over his period.
9
Bu since he early 1970s, pro-duciviy growh has decoupled rom median wage growh. Consequenly, nearly all o he income gains rom he las 40 years o growh have gone o he riches 10 percen.
10
  And in he pas decade, median amily income acually declined.
11
In 1963, Presiden John F. Kennedy amously declared ha “a rising ide lis all boas.” oday, however, hisno longer holds rue.
 
3Center or American Progress | Middle-Out Mobility: Regions with Larger Middle Classes Have More Economic Mobility
 As economic advancemen has salled or mos amilies, he circumsances ino which Americans are born increasingly dicae heir uures. A number o sudies sugges hahe Unied Saes enjoyed subsanial inergeneraional mobiliy rom he 1940s oaround 1980.
12
Bu his poswar period o economic opporuniy began o sall or hegeneraion o Americans who joined he workorce during he 1980s.
13
In he ollowinghree decades, mobiliy has sagnaed, and he prognosis or oday’s children is paricu-larly worrisome—Sanord Universiy Proessor Sean Reardon ound ha he educa-ional achievemen gap beween rich and poor sudens grew 40 percen over he pas 30 years. Tis is a roubling indicaor ha could signal urher declines in mobiliy.
14
  As he Pew Economic Mobiliy Projec noed, “he view ha America is ‘he land o opporuniy’ doesn’ enirely square wih he acs.
15
Indeed, daa show ha he UniedSaes has less relaive mobiliy han almos any counry in Europe. In paricular, Pew ound ha he op and botom are “sicky”—42 percen o children born o parens inhe poores income quinile remain in he botom quinile, while 39 percen born oparens in he op h remain here.” When Pew looked a he mobiliy prospecs or poor black children, hey ound hahey were worse han hose or poor whie children. Tey also ound ha a majoriy o  black children whose parens were middle class in he lae 1960s grew up o have lessamily income han heir parens did. Indeed, almos hal o black children whose par-ens were in he middle income quinile have allen o he botom quinile, compared oonly 16 percen o whie chilren. America considers isel o be a counry in which success is deermined by alen andhard work, no he size o your parens’ bank accoun. Declining mobiliy direcly conradics his principle and also hreaens our uure prosperiy. Economic growhdepends on ensuring ha we can make ull use o a precious naional resource: he American workorce. Ta means we mus culivae individuals’ alens and make sureha every person can realize heir ull poenial.
16
Tis is no merely a moral mater, i isan economic imperaive: When one person is held back, all Americans are held back.
Regions with larger middle classes have more economic mobility
 Wih economic mobiliy on he decline, i is criical o undersand wha acors mighslow or reverse his rend. Ta is why he repor rom Chety and his colleagues is soimporan and has garnered so much atenion. Teir ndings show ha variaions inmobiliy are no random, bu raher are sysemaically associaed wih cerain regionalcharacerisics.

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->