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The American dream doesn’t exist in many neighborhoods

IT IS a bipartisan cliché in America that all children should have the opportunity to succeed. Last year, President Donald Trump said “we want every child in America to have the opportunity to climb the ladder to success” as he lauded school choice. Last month, while savaging Mr Trump’s economic policies, Barack Obama suggested that “every child should have opportunity”. But a new paper by Raj Chetty an economist at Harvard and his colleagues underlines how far the United States is from offering opportunity to all—and how much where a child is born can reinforce the inequalities that stem from to whom they are born.

The researchers combine census and tax data covering 20.5m people born between 1978 and 1983—about 96% of the total number of children born in that period. They study the impact of both parental and neighborhood characteristics on the outcomes these children enjoyed as adults, focusing on America’s 74,000 “census tracts” subdivisions containing a few thousand people each.

Their data demonstrate inequality of opportunity from birth. On average, people born into the bottom 1% of American families in terms of incomes reach the 30th income percentile as adults—far below the 50th percentile that would be expected if there was no relationship between incomes across generations. Parental incomes are also a strong predictor of other outcomes: education levels, incarceration rates and the likelihood among women of being a single mother. People born into the bottom 1% of American families in terms of income between 1978 and 1983 had a 6% chance of being in jail on April 1st 2010, compared to a 0.1% chance among those born into the top 1% of incomes. Race and gender play additional roles: black men born into the poorest 1% of families grow up to reach only the 23rd income percentile themselves and had a 21% chance of being in jail on April 1st 2010.

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