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Thirteen Economic Facts about Social Mobility and the Role of Education

Thirteen Economic Facts about Social Mobility and the Role of Education, Michael Greenstone, Adam Looney, Jeremy Patashnik, and Muxin Yu. The Hamilton Project • Brookings Institution. June 2013.

“This document provides thirteen economic facts on the growth of income inequality and its relationship to social mobility in America; on the growing divide in educational opportunities and outcomes for high- and low-income students; and on the pivotal role education can play in increasing the ability of low-income Americans to move up the income ladder. It is well known that the income divide in the United States has increased substantially over the last few decades, a trend that is particularly true for families with children. In fact, according to Census Bureau data, more than one-third of children today are raised in families with lower incomes than comparable children thirty-five years ago. This sustained erosion of income among such a broad group of children is without precedent in recent American history. Over the same period, children living in the highest 5 percent of the family-income distribution have seen their families’ incomes double. What is less well known, however, is that mounting evidence hints that the forces behind these divergent experiences are threatening the upward mobility of the youngest Americans, and that inequality of income for one generation may mean inequality of opportunity for the next. It is too early to say for certain whether the rise in income inequality over the past few decades has caused a fall in social mobility of the poor and those in the middle class—the first generation of Americans to grow up under this inequality is, on average, in high school—but the early signs are troubling. Investments in education and skills, which are factors that increasingly determine outcomes in the job market, are becoming more stratified by family income. As income inequality has increased, wealthier parents are able to invest more in their children’s education and enrichment, increasing the already sizable difference in investment from those at the other end of the earnings distribution. This disparity has real and measurable consequences for the current generation of American children. Although cognitive tests of ability show little difference between children of high- and low-income parents in the first years of their lives, large and persistent differences start emerging before kindergarten. Among older children, evidence suggests that the gap between high- and low-income primary-and secondary-school students has increased by almost 40 percent over the past thirty years.”

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