Chances of Americans Out-Earning Their Parents Falls Dramatically
The chance that young Americans will earn more than their parents may be no more than a coin flip now, new research says.
According to The Equality of Opportunity Project, people born in 1940 had about a 90 percent chance of out-earning their parents. For those born in 1980, that chance has dropped to 50 percent.
While children born to poorer families in the Northwest have a better chance at upward mobility than those in many other parts of the country, project researcher and fellow at the Stanford Institute for Economic Policy Research, Robert Fluegge, said the region hasn’t escaped the overall trend.
“There have been some steep declines in the upper Northwest,” Fluegge said. “Now, part of that is likely due to the fact that parents in the upper Northwest were probably already making a decent amount of money relative to people in the rest of the country.”
In terms of relative mobility — that is, when comparing kids to their local peers instead of incomes overall — people in the Northwest do well, Fluegge said. Seattle ranks first and Spokane ranks ninth, meaning children from poor families who grew up in these places make more at age 26 than children who grew up in other metro areas.
The research showed that income inequality accounts for more than two-thirds of the decline in children out-earning their parents. Fluegge said the country’s economic growth has not been a broadly-shared growth. But cities that fared better have some qualities in common.
“What we find, based on a lot of the studies that we’ve done,” he said, “is that exposure to good places, good teachers, good schools, good, sort of innovative societies and practices seems to be very important in success later in life.”
Researchers at the project said that cities where children’s chances of moving out of poverty remain high tend to share five characteristics: low residential segregation, a large middle class, strong families, a large amount of social capital, and high-quality public schools.
Featured Image: Research finds Americans born in 1980 are far less likely to out-earn their parents than Americans born in 1940. (Flickr)