Children growing up in America today are as just as likely - no more, no less - to climb the economic ladder as children born more than a half-century ago, a team of economists reported today.
Social movements have delivered better career opportunities for women and members of minority groups, and government grants have made college more accessible, but the report suggests that people who grow up poor today have the same odds of staying poor in adulthood that their grandparents did.
The new study, from a group led by Raj Chetty, a professor of economics at Harvard University, 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 how much a person’s parents earn is more consequential for American youths than ever before because the difference between the bottom and the top of the economic ladder has grown starker and climbing the ladder hasn’t gotten any easier.
Those findings cast Washington’s 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 Lawrence Katz, a Harvard economist and mobility scholar who was not one of the paper’s authors but has reviewed the findings.
Americans have always placed great faith in economic mobility, the idea that a child born into poverty can grow up to be middle class, or that a middle-class child can grow up to be rich.
As the country 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 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.
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.
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.”
Several economists who study mobility and inequality expressed surprise at that stasis - including Chetty, the lead author.
“I am really struck by how stable it seems to be,” he said. “I would not have expected that, because many things have changed over time.”
Front Section, Pages 2 on 01/23/2014