economic mobility

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We're data geeks here at State of Opportunity. And there's a treasure trove of data (and more to come!) housed at the Institute for Social Research at the University of Michigan. The Panel Study of Income Dynamics (PSID) has been around since 1968 and is the longest-running household panel survey in the world. We're talking tens of thousands of data points from more than 70,000 individuals over more than four decades. 

Researchers have mined PSID data for all kinds of economic mobility studies. My colleague Dustin Dwyer blogged about it back in 2012 before he went to a U of M conference where social scientists presented their findings using PSID data across three generations: 

I've already had a chance to look at some of the papers that will be presented, and there are some tantalizing findings. Jean Yeung of the National University of Singapore and two co-authors from New York University looked at the black-white achievement gap across three generations. They found evidence that discrimination in the grandparent's generation had an impact on children's outcomes decades later.

Other papers look at the effects of extended family – aunts, uncles, cousins – to see how they affect economic mobility in other countries.  

And now there's a new generation to add to the mix. All of the children in the original cohort will have reached adulthood by this year, so PSID researchers will collect information on this new generation of kids ages 0 to 17. 

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In the early 1800s, the newly formed state of Georgia had a lot of new land under its control. The land had been taken mostly from the native Muskogee and Cherokee people, and leaders of the young American state were looking for ways to transfer the land to white settlers. What they ultimately decided on was a series of lotteries. 

The forced transfer of property from native people to white settlers was common in America during the 19th century, but the lottery system was not. It meant that basically any white male adult in Georgia, rich or poor, had the same shot at winning a valuable piece of land. And, while the system itself was unjust and just plain wrong on multiple levels, it also set up an ideal research experiment.

If you're a social scientist looking back, what you see in Georgia in the early 1800s isn't just a lottery, it's a randomized controlled trial. And it allows economists to ask a question that's still relevant today: What happens to a family when it suddenly comes into wealth? 

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We know that kids who grow up in low-income homes are less likely to have high incomes as adults. But which factors most help kids climb the economic ladder, and which hold them back? The Pew Economic Mobility Project put together a handy, interactive site where you can combine different factors such as race, marital status and education to determine which combinations give people the best odds of getting ahead. Are you a single black female? If you get a college degree, your chances of climbing the economic ladder are at 83 percent. Same person, no degree? You have only a 9 percent chance of moving up, according to Pew.
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The New York Times has an interactive graphic that lets readers compare economic mobility across the country. Several towns and cities in Michigan are places where it is least likely a child will be able to climb out of poverty and move up to the top of the economic ladder. Children from the Grand Rapids area are only .7% more likely than kids from the Detroit area to successfully make the climb. Roll over the map for data from your area and the rest of the country.
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Oh the summer holidays. Frankly, some things in the news get missed. So I'm glad the folks at Sociological Images were paying attention to recent economic data bout consumer spending and economic recovery the Wall Street Journal originally broke down. 

According to their analysis the talk of true economic growth might be premature. As a nation, we might be spending more now, but we're not really making any more money than we were before. That doesn't seem like  a recipe for sustained recovery. 

Read the full analysis, with a few more charts. 

Jennifer Guerra / Michigan Radio

Be honest: How many of you made a New Year's resolution to save more money?

Saving money can be especially hard to do in a tough economy, so kudos to you. For families at the bottom of the economic ladder, saving money can make a real difference.

Erin Currier directs the Pew Economic Mobility Project. She says "when low income families can develop their own savings, their own assets, their children are significantly more likely to move up the income ladder."

Currier's team did a 2009 study called "A Penny Saved is Mobility Earned," and they found that savings and upward mobility are linked together, especially for families in the lowest income bracket.

Children of low-saving (i.e., below median), low-income parents are significantly less likely to be upwardly mobile than children of high-saving, low-income parents.

Seventy-one percent of children born to high-saving, low-income parents move up from the bottom income quartile over a generation, compared to only 50 percent of children of low-saving, low-income parents. 

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In some reporting related to State of Opportunity's work, WBEZ in Chicago recently started a new series on their Front & Center program about the American dream. In this show, WBEZ explains why for so many people the American dream is just about getting by. To listen to the conversation, follow the link below.
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We've been taking a look at what research can tell us about getting ahead in America. Last week, we brought you "Five facts about achieving the American Dream." This week, we're keeping the format, but changing the focus. Here's our list of five ways to improve opportunity for disadvantaged kids:

1. Start in the home.

So let’s meet Angela Ducket, and her daughter, Aurora.

Pew Economic Mobility Project

Our State of Opportunity team is looking into ways disadvantaged children in Michigan can get ahead, and we're planning on bringing you many personal stories of families that are working to do just that. But for the next two weeks, we want to take a look at what research can tell us about getting ahead in America. Today, we have a list of five facts about the American Dream.

Before we get to our list of facts, I want to tell you about a dark and dingy room in the basement of the Institute for Social Research building at the University of Michigan.

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Former Obama economic adviser Larry Summers writes in the Washington Post: "It is hard to see who could disagree with the aspiration to equalize opportunity, or fail to recognize the manifest inequalities in opportunity today."
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