New Study Finds the American Dream Is Even More Dead Than You Thought

By
Photo: Mark Ralston /AFP/Getty Images

One of the most obvious (and ubiquitous) lies in American political rhetoric is that the United States is the only country where poor kids sometimes grow up to become wealthy politicians.

“I live in an exceptional country where even the son of a bartender and a maid can have the same dreams and the same future as those who come from power and privilege,” Marco Rubio said when he launched his presidential campaign last year. Barack Obama has similarly claimed that his own story of upward mobility would have been possible “in no other country on earth.”

But even as our leaders assure us that only America has escaped the grip of feudal rule, study after study has shown that bartenders’ sons born in Canada and Western Europe have a better chance of growing up to see bartending as a lowly profession than ones born here.

The tension between our self-conception as an exceptionally meritocratic society — and the reality that America’s deep poverty and threadbare social safety net makes it exceptionally socially immobile — is reflected in the bipartisan obsession with restoring “equality of opportunity.”

But as Vox’s Dylan Matthews has argued, genuine equality of opportunity is impossible to achieve without an equal distribution of economic resources, good parents, favorable genes, and many other things. So, what politicians really mean by the phrase is something like: “America should be more socially mobile than it is, and, ideally, more socially mobile than any other nation.”

A new paper from the National Bureau of Economic Research suggests that we may be even farther from attaining the latter goal than previously thought.

Most research on social mobility has measured changes in wealth or educational attainment over a single generation. For example, a 2014 study by economists at Harvard and Berkeley found fewer than 10 percent of those born into the bottom fifth of wealth distribution make it into the top fifth. The middle class fared only slightly better — roughly 20 percent of those born into the middle fifth reached the top fifth by the end of their lives.

But those grim statistics may actually overestimate the level of social mobility in American society. In NBER’s new paper, Northwestern University’s Joseph Ferrie argues that one must look at changes in class status over multiple generations to get a true sense of a society’s economic fluidity, “because there can be these one-generation blips that obscure the total amount of generational mobility.”

The Washington Post’s Ana Swanson offers this illustration of how one-generation fluctuations can mask a broader class stability:

For example, suppose you have a banker whose son decided to become a poet, surrendering a huge income in favor of a more fulfilling career. But the poet’s daughter decides to go back to the family business and become a banker.

If you just looked at the poet and his daughter, you might think that economic mobility is alive and well in America – she probably makes a lot more money than her father does.

But actually, the daughter might be drawing on much older, preexisting family resources – such as financial resources, personal connections, or knowledge about how Wall Street works from her grandfather – that make it easier for her to become a banker than it is for the average kid.

Previous studies have found that the correlation in educational attainment between American parents and their children hovers between .4 and .6. Which is to say: If your parent completed one year of college, while mine only finished high school, you will end up with somewhere between 40 and 60 percent of an extra year of schooling than I will, all else being equal.

By bringing grandparents into the equation, the new study suggests that the correlation in educational attainment between generations is actually 20 percent higher — ranging from .5 and .7.

The findings point to the profound difficulty of promoting social mobility amid vast inequality in the distribution of wealth. Even when good schools and fortuitous circumstances enable one generation to escape poverty, bad luck can easily return the succeeding generation to the family’s long-term residence on the economic ladder. Without the safety net of accumulated family wealth, the children of self-made men and women can be “unmade” in a hurry. With such wealth, by contrast, the trust-fund deadbeat’s child can follow her grandparents’ footsteps back through Harvard.

Thus, making America an exceptionally mobile society will require a greater degree of income and wealth redistribution than most politicians would dare to suggest: To get more poor kids up the “ladder of opportunity” we’re going to have to shorten the space between its rungs.