Brookings: Income mobility is not what it used to be

Higher Education Gap May Slow Economic Mobility - New York Times:

“The American dream of opportunity is alive, but frayed,” said Isabel Sawhill, another author of the report, “Getting Ahead or Losing Ground: Mobility in America.” The report is at economicmobility.org

“It’s still alive for immigrants but badly tattered for African-Americans,” said Ms. Sawhill, an economist and a budget official in the Clinton administration. “It’s more alive for people in the middle class than for people at the very bottom.”

The report and planned studies constitute the most comprehensive effort to examine intergenerational mobility, said John E. Morton of the Pew Trusts, who is managing the project. It draws heavily on a federally supported survey by the University of Michigan that has followed thousands of families since the late 1960s.

A chapter of the report released last fall found startling evidence that a majority of black children born to middle-class parents grew up to have lower incomes and that nearly half of middle-class black children fell into the bottom fifth in adulthood, compared with 16 percent of middle-class white children.

That is a shocking statistic. It's easy to understand why poor black kids have trouble getting ahead: a combination of social capital, culture, racism, and lack of resources. It certainly is possible to succeeed if you're poor--the difference is, if you're poor you have to do every single thing right, while the rest of us have some margin for error. But middle class kids have parents to model and enforce successful behavior; they also have resources to ride out life's storms. Nor is racism a particularly plausible explanation. Racism may depress the earnings of middle-class blacks--but not to poverty level. The returns to education are actually higher for African-Americans than for whites (though in part this is because they're starting from a low base).