Social Mobility is Still Going Strong in the Land of Opportunity

Is the American dream on life support? That’s the perennial claim of “declinists,” who are convinced that the American spirit of opportunity is at death’s door. That claim was recently bolstered by research from a team of top economists, who found that half of today’s 30-year-olds are worse off than their parents were at the same age. A closer look at that study, however, reveals that opportunity is alive and well. That does not mean we should be complacent about removing barriers to success for those born disadvantaged, but neither should we worry that the nation’s best days are behind us.

For a long time, some declinists reluctantly acknowledged that Americans enjoy much higher living standards than those of previous generations. But, they argued, it’s harder to rise from rags to riches than it used to be. That claim ran against 20 years of academic research on “relative economic mobility” — moving from, say, the bottom fifth to the middle fifth of family income between childhood and adulthood. Those studies consistently found that any changes in how often such transitions happen have been so small as to be difficult to detect reliably.

That academic consensus was ratified two years ago by Stanford University economist Raj Chetty and his colleagues, who used tax records to show that relative mobility has been flat since the early 1970s. But their latest paper gives the declinists an out. “The Fading American Dream” finds that “absolute mobility” — exceeding the income of one’s parents — has declined dramatically over the past 45 years. In 2014, 30-year-olds had only a 50–50 chance of beating their parents, whereas nearly all 30-year-olds did in 1970.

Are the declinists finally — finally! — right that today’s children will be the first generation to do worse than their parents? No.

Continue reading at National Review.