It used to be that the vast majority of children ended up earning more than their parents. Today, however, the situation is considerably different. According to recent research on intergenerational mobility, approximately 90% of those born in the 1940s earned more than their parents, while only about 50% of those born in the 1980s do.
The Equality of Opportunity Project — now part of the Opportunity Insights program at Harvard University — considered average incomes of 26-year-olds raised in the bottom quartile of income in 2,973 U.S. counties and county equivalents (such as parishes, boroughs, census areas, and certain cities). A 26-year-old from this background who earns more than the national average for the bottom quartile is said to have managed upward income mobility.
The researchers found that 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 — declines every year of childhood spent in nearly 1,000 low-income counties. To highlight the substantial geographic variation of this pattern, 24/7 Wall St. reviewed the 50 counties and county equivalents where the average income losses are greatest.
Children growing up in counties with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates are significantly more likely to surpass their parents later in life. The counties where the American dream is dead include some of the worst counties to live in.