What’s Killing The American Dream?

by Stuart Shapiro

Why income mobility has steadily dropped in the United States is a question that has vexed conservative and liberals.  The chart above shows where kids born to low income families have the best and worst chances of escaping poverty.  It comes from a landmark new study that has conclusions that will make both sides happy:

But the researchers identified four broad factors that appeared to affect income mobility, including the size and dispersion of the local middle class. All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods.

Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups.

Economically diverse communities are important.  So are strong families, schools, and civic institutions.  The southern United States has income mobility that is the worst in the developed world.  Big cities like San Francisco and Seattle are as good as anywhere in the world to be born poor.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.