The expectation that children born in the United States will do better than their parents is the bedrock of the American dream. Rates of upward income mobility have fallen sharply in recent decades, however, and in some areas they are close to zero.
According to recent research on intergenerational mobility, the percentage of children who grow up to earn more than their parents is down from approximately 90% of children born in 1940, to 50% of children born in the 1980s.
Economic research organization The Equality of Opportunity Project considered average incomes of 26-year olds raised in the bottom quartile in 2,973 U.S. counties. A 26-year old from this background who earns more than the national average for his age and income group is said to have managed upward income mobility.
The researchers found neighborhood environments have substantial effects on children’s long-term economic outcomes. The probability of earning in adulthood more than $26,090 — the average annual income for the bottom quartile nationally — goes down every year of childhood spent in nearly 1,000 counties. To highlight the substantial geographic variation on this pattern, 24/7 Wall St. reviewed the 50 counties where the average incomes lost are greatest.
Children living in Oglala Lakota County, South Dakota have the worst odds of earning a decent wage in adulthood. The annual income a child in a low-income family is likely to make as an adult declines by 1.9% each year he or she spends in Oglala Lakota. At this rate, close to $500 is lost annually from the modest income a child might have earned growing up in a different neighborhood.
The areas that produce worse outcomes for low-income children have several economic characteristics in common. For example, poverty rates in all but a handful of these counties exceed the national poverty rate of 15.5%. In 19, the poverty rate exceeds 30%.
Thirteen of the 50 counties on this list are home to or overlap with American Indian reservations. This includes the top four counties, where the vast majority of residents identify as American Indian. Native Americans are one of the nation’s most economically disadvantaged populations. Unique business regulations, poor services and poor access to amenities, as well as housing challenges are among the limitations contributing to the exceptionally poor economic mobility in these areas.
In 2014, 28.3% of single-race American Indians and Alaskan Natives lived in poverty, almost double the national average poverty rate and the highest of any racial group.
Unsurprisingly, the counties where children have the best chance for success have below average poverty rates nearly without exception. Previous research has shown upward mobility is also strongly correlated with low segregation, low income inequality, high school quality, and family structure.
These are the counties where the American dream is dead.
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