Intergenerational Mobility

Discussion about income mobility in the United States usually revolves around the concept of upward mobility which is defined as a person’s chance to make it to a higher economic strata than the one they arrived in.  While the concept is controversial and subject to many debates, a similar concept called intergenerational mobility is less discussed. Intergenerational mobility is defined as how the economic status of children compare to their parents. If for instance children of poor parents are likely to remain poor then there is low intergenerational mobility.

A group of academic economists recently took on this concept and using data produced a map that shows the amount of intergenerational mobility across the United States. The key takeaway from the study is that large urban areas, for the most part tend to have higher mobility while the Midwest and the South fare worse.  The New York Times that also reported on this data set gives an example: “On average, fairly poor children in Seattle — those who grew up in the 25th percentile of the national income distribution — do as well financially when they grow up as middle-class children — those who grew up at the 50th percentile — from Atlanta.”

Unfortunately the study does not really paint a picture of which policies help to grow this mobility.  It does seem to suggest that this is not a “parent-lead” event and some traditional indicators i.e. tax policy does not correlate to this type of mobility.

The only definite conclusion to be drawn, echoed by Harvard economist Nathaniel Henderen, is that “Where you grow up matters. There is tremendous variation across the U.S. in the extent to which kids can rise out of poverty.” Yet even this conclusion pertains mostly to poor and middle class children. Affluent children tend to grow up to be affluent wherever they are in the United States.