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Movin' On Up: It's Much Harder If You Live in the Wrong Town

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Alina Vincent Photography, Getty Images
The fact that it's getting harder to move up the economic ladder shouldn't come as a surprise anymore. For years, studies have shown that economic mobility in America has declined, both relative to other countries and to our nation's own history. And it's not like there's any lack of culprits -- research has cited a variety of reasons, ranging from the impact of single-parent households to the importance of good schools to the effect of America's thin economic safety net. But recently, a study by economists at Harvard University and UC-Berkeley uncovered another major factor: geography.

In "The Economic Impacts of Tax Expenditures," economists Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez divided the country into 741 areas, most of which include urban, suburban and rural sections. They then analyzed the degree of economic mobility in each area, noting the relative difficulty that a lower-income child would face as he or she attempted to move up the economic ladder.

The toughest climb in the country is in Nome, Alaska, where a child born into the bottom fifth of households has a 2.2 percent chance of rising to the top fifth. On the opposite end of the scale, a child born in the bottom fifth of households in Gettysburg, S.D., has a 34.8 percent chance of making it to the top fifth.

A few patterns emerged from the research: There's a whole swath of tough-to-move-up-from areas encompassing most of the Southeastern U.S., and a similarly difficult region radiating out from Chicago. On the flip side, there's a huge section of the Great Plains and another sizable section in the West where children born into poverty have a far better than average chance of making it up the economic ladder.

While the study's authors didn't offer any definitive reason for differences in relative economic mobility, they found some interesting correlations. School quality certainly had a significant impact, as did tax rates and numbers of single parents. As David Leonhart noted in the New York Times, one interesting angle was public transportation: In areas with economic segregation and poor public transportation, it was especially hard to rise out of poverty. This isn't all that surprising: The harder it is for lower-income parents to get to work, the more time they must spend neither at work earning money nor at home taking care of their children.

But regardless of whether the key factor is the quality of schools or the time parents spend in traffic, a city's economic segregation or its infrastructure spending, one thing is clear: where we live can, indeed, affect where our children are going.

Bruce Watson is DailyFinance's Savings editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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17 Comments

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larry

I wish the silver spooners would open there eye before they open there mouths. Its a shame that people with money will condem people with out. there is alot of people riding the system but there is a hole hell of a lot more that are not. start talking about the silver spooner riding the system. Most of them type on this blog, sad real sad.

July 23 2013 at 11:54 PM Report abuse rate up rate down Reply
2 replies to larry's comment
h.hughjardon

I work my a$$ off and get raped on taxes.

Wht don't you question why we have a $3.8 trillion budget instead?

July 24 2013 at 12:02 AM Report abuse rate up rate down Reply
setanta54s_back

wtF ?
silver spoon_ers out here ?

July 24 2013 at 12:14 AM Report abuse +1 rate up rate down Reply
h.hughjardon

Bruce....kinda throws a wrench in the whole one size fits all undefined living wage. Geography plays a role.

July 23 2013 at 10:27 PM Report abuse rate up rate down Reply
Sonny

The Federal Govt has enslaved all of these people with all the govt handouts and foodstamps. These people have traded their freedom for these measley govt handouts, and they just want more and more. If they were weaned, they would become self sufficient and have much better and productive lives. Too many people are climbing on the welfare wagon because it is so easy, and the amount of people pulling the wagon are fewer and fewer.............. A total collapse is inevitable, because the politicians keep on with the staus quo............. and people will die.

July 23 2013 at 8:13 PM Report abuse -1 rate up rate down Reply
ccdae5

MOVE!

July 23 2013 at 5:56 PM Report abuse -2 rate up rate down Reply
setanta54s_back

omg as IF no one not only got on a bus and MOVED ON at the appropriate AGE. BUT
they had their family's blessings.

and how many went thousands of miLES via ship air craft for the SAME REASONS ?


mygawd--those motivated WILL MOVE ON


and that's why appalachia ETC STILL FASCINATES the motivated entrants to the USA-
THEY LEFT their native homes,culture and languages
due to being MOTIVATED for a better life and opportunities..........

right zipcode me @rse !

July 23 2013 at 1:46 PM Report abuse -1 rate up rate down Reply
torandersen

I guess if you're born in it and with it you don't have to move anywhere you've got it!

so just what exactly is "economic segregation" is that like the same thing as economic servitude.?

July 23 2013 at 1:31 PM Report abuse +4 rate up rate down Reply
1 reply to torandersen's comment
setanta54s_back

damN GOOD QUESTION- !!!!!!!!!!!!!!!

i believe THEY want the economic servitude as in SERFDOM.
someone has to FOOT THEIR BILLS.

July 23 2013 at 1:48 PM Report abuse rate up rate down Reply
FX

Hard to move up when you live in a town like Stockton, California or Detroit, MI., where the "leaders" have squandard the money, allowed crime to flourish, and ultimately just forgot about the residents.

July 23 2013 at 1:13 PM Report abuse +4 rate up rate down Reply
2 replies to FX's comment
setanta54s_back

one at a time you send them OUT and as they get settled and stable THEY send for another to join them.

when the politicians care more about illegals and the other generational parasites which INCLUDES THEIR UNIONS
and you are only a tax return number and contributor-
it's TIME to get OUT !!!!!!!!!!!!!!

take the losses and then CUT THE LOSSES.
it's NOT complicated.

July 23 2013 at 1:52 PM Report abuse -1 rate up rate down Reply
fritzcalkins

I think it would be damned easy to leave Detroit, Use your two feet.

July 23 2013 at 5:41 PM Report abuse -2 rate up rate down Reply
Artie

Did these folks actually get paid by a gov't grant to do this research? If so, the taxpaying public should demand it's money back. I could have told you the same thing without the research.

July 23 2013 at 10:12 AM Report abuse +3 rate up rate down Reply
DICK CLARK

ain't no hooks in your butt. get out of that tow and become a politician.

July 23 2013 at 8:18 AM Report abuse +2 rate up rate down Reply
1 reply to DICK CLARK's comment
legacykwst

Hint: It sounds simpler than it is. 1. It takes money to move.... and the destination area may be much more expensive. 2. By going there they may be leaving behind extended family that they may depend upon... and who may depend upon them. 3. Unless they have a job already waiting, such a move may mean a further downhill slide because that higher cost of living may mean extended homelessness... They may lack connections and be totally unfamiliar with the new area. I do genealogy... and live in LA. I can't tell you how many people I've tracked who have come to LA over the last century to lift themselves out of poverty. Guess what? a very large percentage fail.... instead, they never gain a footing and sink more deeply into poverty

July 23 2013 at 10:08 AM Report abuse +4 rate up rate down Reply
2 replies to legacykwst's comment
setanta54s_back

you get out and then SEND for the extended family-

same as emigrating.

July 23 2013 at 1:53 PM Report abuse -3 rate up rate down
elaineen

Do not move to L.A. unless you have a job waiting.

July 23 2013 at 5:34 PM Report abuse rate up rate down