Saturday, July 27, 2013

Location and economic mobility

Earlier this week NYT ran a front page story about a study by four economists from Harvard and UC-Berkeley that looks at how economic mobility varies across different parts of the country.  The study has received a lot of attention because it is accompanied by a map that shows mobility rates by city and region.  Six of the seven cities with the highest upward mobility are in the west; the ten cities with the lowest rates are in the south or midwest.

The story has received a lot of play, and most of that focus has been on the south.  All of the human interest anecdotes in the NYT piece come from Atlanta, the city with the lowest mobility rate.  The N&O version included a quote from a UNC law professor: "I think of the South as the national home of poverty."

The odds that a child in a family in the bottom fifth of the income distribution will end up as an adult in the top fifth are very, very low no matter where that child lives.  The highest odds are in Salt Lake City, San Francisco and San Jose (11%); the lowest are in Atlanta and Charlotte (4%) with Detroit a notch above at 5%.

The factors associated with higher mobility include low percentages of households headed by single parents, high percentages of households attending church, higher quality schools, and higher percentages of middle class households.  Residential segregation by income also plays a role; areas where low income households are segregated from middle income households have lower mobility.  Tax policy does not seem to matter all that much. 

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