Getting Ahead or Losing Ground: Economic Mobility in America

The endeavor for better economic opportunities, a comfortable life, and the ability to provide a bright future for the next generation has long been part of the American ethos. But new research from the Pew Charitable Trust’s Economic Mobility Project, conducted by the Brookings Institution, indicates that economic inequality is increasing, economic growth has slowed, and family background and education are both strongly tied to an individual’s likelihood of upward mobility. The report, Getting Ahead or Losing Ground: Economic Mobility in America, concludes that the poorest families in the country are at risk of losing additional ground on the economic ladder, especially given widening gaps in higher education attainment.

FINDINGS

Trends in Economic Mobility

• Median family income has grown about 20 percent since 1973—a slower growth rate than in the previous generation (1947-1973), during which the average family’s income roughly doubled.
• The gap between the rich and the poor has been increasing ever since the mid-1950s, for both individual earners and families.
• About 42 percent of American men born in to the poorest fifth of families stay in this bottom fifth when they become adults.

Wealth and Economic Mobility

• Thirty-six percent of children born to parents in the lowest economic quintile remain in the lowest quintile as adults.
• Eleven percent of children born in the top quintile move down to the lowest quintile as adults.
• Only 7 percent of children born into the bottom wealth quintile make it into the top quintile as adults.
• Children born to parents in the middle of the wealth distribution have an equal likelihood of moving up or moving down in the distribution

Education’s Role in Economic Mobility

• For children born to parents in the bottom wealth quintile, only 5 percent of those without a college degree will move to the top quintile, compared to 19 percent of those who have a degree.
• Almost 55 percent of those who have a college degree and were born to parents in the top quintile remain in the top quintile.
• Seventy-four percent of those with a college degree had incomes greater than their parents’, compared to 63 percent of those without a college degree.

The entire report may be downloaded in PDF format from the Economic Mobility Project web site.

DID YOU KNOW?

• “Stickiness at the ends” is the term used to describe the fact that people born at the two extremes of the wealth distribution tend to stay there as adults.  
• Regardless of parents’ wealth quintile, children are more likely to make it to the top two wealth quintiles if they have a college degree.
• Without a college degree, children born into the lowest wealth quartile have a 45 percent chance of staying there.