Saturday, November 19, 2011

Upward Mobility in America

  Pew Economic Mobility Project has just published another in their series of studies on upward mobility in the US. This is titled Cross-National Research on Intergenerational Transmission of Advantage. It was done in conjunction with The Russell Sage Foundation and the Sutton Trust, and the full results will be published next Spring.

The chart above demonstrates the main finding:

          "In the United States, there is a stronger link between parental education and children's economic, educational and socio-emotional outcomes than in any country investigated." (See top line study results)

Cognitive means IQ and other test scores. Economic means income and labor market position. Educational is grades and final attainment. Physical is health and birth weight. And socio-emotional is mental health and childhood behavior. So what this says is:

Who we are and who we become is directly related to who are parents are in terms of education, and presumably income. If our parents are well off/well educated, the odds are better for us that we will be intelligent, well off, well educated, healthy and happy. And this is more true in the US than any other country studied.

Here's another Pew Study, this time with the Brookings Institute Economic Mobility: Is the American Dream Alive and Well?


It's part and parcel of the American myth that anyone can make it to the top, and that people get rewarded for intelligence, skills and effort. Look at the following chart from the same study:

Our society is simply not as open or as upwardly mobile as we think. Birth advantage matters. A question the research doesn't seem to answer: Is this a relatively recent phenomenon? What has been the trend over time? One thing we do know is that income inequality has grown dramatically and that beginning in the 1970s', and accelerating through the present, median income has not kept pace with productivity:

In the postwar period, through the mid-70s', income and productivity grew together. Then income started falling behind, until 2000, when the trend accelerated dramatically:

Normally one would think mobility stickiness might lead to income differentials and income lagging productivity. But I suspect it's the other way around. Lots of factors, which I will explore in later posts, have contributed to income inequality and incomes lagging productivity growth. Some of these are: rapid technological change, globalization and off-shoring of manufacturing jobs, government policies preferencing capital and finance over labor, the decline of unions, the extraordinary returns to financial capital through deregulation, with dramatic growth of world money supply looking for US investment homes. 

This is part of the heart of Occupy Wall Street: the playing field is no longer level.

Wake up, America. There is work to do.

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