from the NYTimes,
JASON DePARLE, January 4, 2012
Harder for Americans to Rise From Lower Rungs
… many researchers have reached a conclusion that turns conventional wisdom on its head: Americans enjoy less economic mobility than their peers in Canada and much of Western Europe. The mobility gap has been widely discussed in academic circles, but a sour season of mass unemployment and street protests has moved the discussion toward center stage.
Supporting Information and Background
Economic Mobility Across Generations, Julia B. Isaacs, The Brookings Institution
Conclusion: Traditionally, studies of economic mobility have looked at either absolute or relative mobility, but not both. Both types of mobility are important to assessing the health of the American Dream.
By all measures, many Americans do get ahead of their parents in real income. Assessing absolute mobility across these two generations reveals that median family income has increased, as would be expected in a period of a growing economy. Moreover, a direct intergenerational comparison shows that two-thirds of Americans make more family income in real terms than their parents did. However, the other one-third fails to surpass the income of their parents, leavingroom for further improvement.
Economic position is strongly influenced by parental economic standing. Children of low-income parents and middle-income parents are much less likely to make it to the top quintile than are children born to parents in the top quintile. Further, a high percentage of low-income children remain in the bottom fifth, calling into question the dream that all children have equal chances of achieving economic
Do Poor Children Become Poor Adults?, Miles Corack, 2006
Conclusion: The major objectives of this paper are to summarize a simple framework used in analyses of generational income dynamics, and to highlight the major findings from the literature by focusing on cross country comparisons. The rich countries in fact differ significantly in the degree of earnings mobility between fathers and sons. The United Kingdom, the United States, and to a slightly lesser extent France, are the least mobile countries with 40 to 50% of the earnings advantage high income young adults have over their lower income counterparts being associated with the fact that they were the children of higher earning parents.
The rewards to higher skilled / higher educated individuals in the labour market, and the opportunities for children to obtain the required skills and credentials are two important factors influencing the degree of generational mobility and the differences across countries. The post war social policy agenda with respect to equalizing opportunities has sought to reduce the significance of family connections in determining access to education and job opportunities, while at the same time increasing access to higher and higher levels of education. Generational mobility is associated with more per student spending on education if the underlying structure of the education system has a preference for those from the least advantaged backgrounds. Countries differ significantly in the impact that education spending has on generational mobility, and more spending could amplify rather then diminish the differences between advantaged and disadvantaged children. These differences have their roots in the more subtle advantages highly educated parents are able to pass on to their children: skills, beliefs and motivation arising from an advantaged family culture and parenting style. These non monetary factors determine the strength of the relationship between a child’s cognitive skills in adulthood and their parents’ education, which in turn is also associated with the degree of generational mobility in a society. Societies leveling these influences across the population display a higher degree of generational mobility.