School & District Management

Education, Opportunity, and a 1-in-10 Chance to Move From Poverty to Wealth

By Sarah D. Sparks — January 22, 2014 2 min read
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If you were born into one of America’s poorest families, you’ve got less than 1-in-10 shot to make it into the top 20 percent of income levels by your mid-20s, according to a new study by the National Bureau of Economic Research.

That’s no worse a chance than a child in poverty had in the early 1970s, but as the income gap between the wealthiest and poorest families grows, “the consequences of the ‘birth lottery’ have never been greater,” finds the study led by Harvard University economist Raj Chetty. It was conducted as part of the “Equality of Opportunity Project,” and includes researchers from Harvard, the University of California at Berkeley, and the U.S. Treasury Department.

The researchers tracked the correlation between a child’s parents’ income and the likelihood of earning a better living than his or her parents for each birth cohort from 1971 to 1993.

A child born into the poorest 20 percent of families has a little less than a 1-in-10 chance of making it to the top 20 percent of earners by age 26, and that rate of social mobility has remained practically unchanged since the 1970s, though the study does not dig into more subtle income improvements or decreases over time such as the likelihood of the poorest children moving up to the working class.

Moreover, since the 1980s, children born into families earning the lowest 20 percent of income have stayed about 69 to 75 percentage points less likely to go to college than peers born into the wealthiest 20 percent, the study found. The researchers use college attendance as a proxy for social mobility for generations born since 1986, who might not yet be old enough to be in the workforce. Prior studies have shown college attendance associated with higher incomes later, but this looks like a pretty different measure of social mobility, as later income also depends on a student’s major and career field.

For educators, the findings highlight the uphill fight to reduce the achievement and opportunity gaps between the poorest and wealthiest students, particularly as another recent study, by the Brookings Institution, points out that wealthy parents can often form a “glass floor” to prevent their less-talented children from suffering a big loss of income as adults, but poor parents are less able to help their progeny break through the “glass ceiling” to a higher income bracket.

As the nation’s educators and policymakers consider new ways to address child poverty, the chronic lack of social mobility will become a bigger sticking point.

Top image: Equality of Opportunity Project.

Bottom image: Brookings Institution

A version of this news article first appeared in the Inside School Research blog.