Economic Mobility in the U.S. — The Myth and the Reality
The Economic Mobility Project has released a fascinating and disturbing report entitled “Economic Mobility: Is the American Dream Alive and Well?” The entire report is well worth a read, but what I found particularly striking was how poorly the U.S. does in terms of economic mobility relative to other developed Western countries, particularly the much-maligned ones in Scandinavia:
The report summarizes the results:
Data on relative mobility suggest that people in the United States have experienced less relative mobility than is commonly believed. Most studies find that, in America, about half of the advantages of having a parent with a high income are passed on to the next generation. This means that one of the biggest predictors of an American child’s future economic success — the identity and characteristics of his or her parents — is predetermined and outside that child’s control. To be sure, the apple can fall far from the tree and often does in individual cases, but relative to other factors, the tree dominates the picture.
These findings are more striking when put in comparative context. There is little available evidence that the United States has more relative mobility than other advanced nations. If anything, the data seem to suggest the opposite. Using the relationship between parents’ and children’s incomes as an indicator of relative mobility, data show that a number of countries, including Denmark, Norway, Finland, Canada, Sweden, Germany, and France have more relative mobility than does the United States. Compared to the same peer group, Germany is 1.5 times more mobile than the United States, Canada nearly 2.5 times more mobile, and Denmark 3 times more mobile. Only the United Kingdom has relative mobility levels on par with those of the United States.
Ironically, despite this sobering data, the myth of the American dream is alive and well — Americans continue to be much more optimistic about economic mobility than their developed-country counterparts:
The underlying belief in the fluidity of class and economic status has differentiated Americans from citizens in the majority of other developed nations. As the data… suggest, compared to their global counterparts, Americans have tended to be far more optimistic about their ability to control their own economic destinies through hard work, less likely to believe that coming from a wealthy family is important to getting ahead, less likely to think that differences in income within their country are too large, and less likely to favor the government’s taking responsibility to reduce those differences.
Lest the report be dismissed as leftist propaganda, it’s worth noting that the Economic Mobility Project is a joint effort of the The American Enterprise Institute, The Brookings Institution, The Heritage Foundation, and The Urban Institute.
Hat Tip: Kevin Drum at the Political Animal.