|WHERE IS THE LAND OF OPPORTUNITY?
THE GEOGRAPHY OF INTERGENERATIONAL MOBILITY IN THE U.S.
|Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez|
Is America still the "land of opportunity"? We show that this question does not have a clear answer because the economic outcomes of children from low income families vary substantially within the U.S. Some cities have rates of upward income mobility comparable to the most mobile countries in the world, while others have lower rates of mobility than any developed country. These geographical differences in upward mobility are strongly correlated with five primary factors: segregation, income inequality, local school quality, social capital, and family structure.
In his State of the Union address on Tuesday, President Obama said the gap was widening between corporate profits and employee wages. The top 1% has done well, he said, but many other Americans have been left floundering. “Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better,” the president said. “But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.”
Is America the “Land of Opportunity”? In two recent studies, we find that: (1) Upward income mobility varies substantially within the U.S. Areas with greater mobility tend to have five characteristics: less segregation, less income inequality, better schools, greater social capital, and more stable families. (2) Contrary to popular perception, economic mobility has not changed significantly over time; however, it is consistently lower in the U.S. than in most developed countries.