Increasing mobility

January 20th, 2014 at 12:00 pm by David Farrar

Bradford Wilcox at The Atlantic writes:

But for all the new attention devoted to the 1 percent, a new dataset from the Equality of Opportunity Project at Harvard and Berkeley suggests that, if we care about upward mobility overall, we’re vastly exaggerating the dangers of the rich-poor gap. Inequality itself is not a particularly potent predictor of economic mobility, as sociologist Scott Winship noted in a recent article with his colleague Donald Schneider based on their analysis of this data.

You will always have inequality. A 45 year old with 30 years experience will almost always have a much higher income than an unskilled 18 year old.

What is more important is indeed mobility, can you be born poor, but rise out of it.

So what factors, at the community level, do predict if poor children will move up the economic ladder as adults? …

Harvard economist Raj Chetty, a principal investigator at the Equality of Opportunity Project, has pointed to economic and racial segregation, community density, the size of a community’s middle class, the quality of schools, community religiosity, and family structure, which he calls the “single strongest correlate of upward mobility.” Chetty finds that communities like Salt Like City, with high levels of two-parent families and religiosity, are much more likely to see poor children get ahead than communities like Atlanta, with high levels of racial and economic segregation.

Very interesting. And the three big ones are:

  1. Per-capita income growth

  2. Prevalence of single mothers (where correlation is strong, but negative)

  3. Per-capita local government spending

In other words, communities with high levels of per-capita income growth, high percentages of two-parent families, and high local government spending—which may be a proxy for good schools—are the most likely to help poor children relive the Horatio Alger story. 

So grow incomes for all, invest in schools and have more two parent families.

But many measures directly related to —such as the size of the middle class in a community, or the gap between the richest and poorest middle-class households in communities—seem far less important than local growth, two-parent households, and local spending.

Good data, but a warning.

Still, we don’t know which way causation runs. High economic mobility might lead to more marriages, creating dual-earner households that would, in turn, facilitate more mobility. Periods of economic growth might make local governments richer, which would lead to more local spending on schools, which better prepare low-income students for college. These are knotty and interlocking variables. 

Would be great to get data for New Zealand.

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11 Responses to “Increasing mobility”

  1. Fentex (1,038 comments) says:

    communities with high levels of per-capita income growth, high percentages of two-parent families, and high local government spending—which may be a proxy for good schools—are the most likely to help poor children

    The bit in there…

    communities with high levels of per-capita income growth

    …being an indicator of opportunity for poor to do better seems a bit of a tautology – where incomes increase, incomes are likely to increase? That doesn’t seem surprising.

    And sans a hypothesis on cause to test the fact that correlation exists isn’t very meaningful, as the article says itself…

    Still, we don’t know which way causation runs. High economic mobility might lead to more marriages, creating dual-earner households that would, in turn, facilitate more mobility.

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  2. dime (10,125 comments) says:

    What a shocker. two parent families do better than solo parents..

    Id like to see a study done on auckland housing – what would it be like if there werent so many solo mothers? an extra 30,000 houses if they had stayed with the dude? problem solved. not to mention the tax cut id get..

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  3. Tom Jackson (2,553 comments) says:

    Equality of opportunity is silly. If there’s only one winner out of one hundred, it is little consolation to the ninety nine losers that they had an equal chance to win.

    [DPF: So you think someone doing well means those who don’t do quite as well are losers. What a fascinating outlook.

    I earn less than Bill Gates. That doesn’t make me a loser. It is not a binary contest between people.]

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  4. dime (10,125 comments) says:

    “Equality of opportunity is silly. If there’s only one winner out of one hundred, it is little consolation to the ninety nine losers that they had an equal chance to win.”

    would a hug make you feel better?

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  5. Tom Jackson (2,553 comments) says:

    would a hug make you feel better?

    That’s probably going to be more effective as social policy than EOO, which isn’t saying much.

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  6. dime (10,125 comments) says:

    Tom – its kind of sad that you think so badly of so many people.

    i know its a lefty thing but still, its sad.

    try seeing the best in people. when it comes down to it, there are very few that arent capable of succeeding in life.

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  7. Tom Jackson (2,553 comments) says:

    try seeing the best in people. when it comes down to it, there are very few that arent capable of succeeding in life.

    That’s not really how things work, Dime. We would do better if we acknowledged that EOO was a silly goal because it’s impossible to make it a genuine reality without massive transfers of wealth and other interventions, and there are good reasons for not wanting to do that. Are we going to have the state insist on two parent families, for example?

    It’s not about being left or right. It’s about not bothering with patently silly ideas.

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  8. Tom Jackson (2,553 comments) says:

    there are very few that arent capable of succeeding in life.

    This is where you are getting it wrong. That’s not what equality of opportunity is about. EOO just says (A) that people of equal merit will have an equal chance of success – it doesn’t say anything about the statistical chance of winning, which might be quite low.

    There’s a political sleight of hand where people who promote EOO are led to think that it means the same as (B) “if you work hard and you merit it, you will be successful”. The latter is different from EOO as the chances of success for those who merit it are 100% whereas for EOO those chances could be anything.

    (B) is a principle with considerable popular appeal, whereas (A) is not. You were talking about (B), not (A).

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  9. jcuk (716 comments) says:

    The fly in the ointment of the two parent family and expecting the solo mums to have stayed ignores that many were abused physically or mentaly in that situation or else the male has walked off ignoring his responsibilities … of course it is better to have 2pfs but not at the expense of the woman involved as was often the situation prior to the benefit.

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  10. Nostradamus (3,433 comments) says:

    Tom Jackson:

    It’s not about being left or right.

    A person who says this invariably turns out to be from the left :)

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  11. jcuk (716 comments) says:

    Just becuase one may harbour some leftish points of view should not mean total dismissal becuase the ‘true path’ is a meld of left and right …. ignoring the idiotic stances of both which serve nobody to any good purpose.

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