November 10, 2014 by Meredith Welch
If you work hard and follow the rules, you too can “move on up” from a working class neighborhood in Queens to a deluxe apartment in the skyline of Manhattan’s Eastside, just like The Jeffersons.
At least that’s how the story goes.
But findings from a new report show that story is unlikely: Where you start in life (i.e., your parent’s income) has a huge impact on where you end up. Only 10 percent of kids born into families in the bottom fifth of the income distribution will reach the top fifth by age 40, compared with 30 percent of those born into the top fifth.
Those odds aren’t great, but data show that educational attainment can be a game-changer, especially for those who start at the bottom. The two graphs below illustrate social mobility for high school dropouts and bachelor’s degree recipients. When viewed side by side, they provide a powerful visual. The pervasive effect of parental income is apparent in both charts, but for degree completers, the impact is less prominent. A college degree really matters.
The report shows that by age 40, an astonishing 54 percent of high school dropouts born into families at the bottom of the income distribution remain there, and only 1 percent reach the top. On the contrary, only 16 percent of college graduates born into the bottom fifth remain in the bottom and 20 percent reach the top.
George and Weezy were outliers. Granted, they probably finished high school, but neither finished college. Without college degrees, very few people move from the bottom to the top. There are several reasons why social mobility is low, especially in comparison with other developed nations, but one clear reason is our education system, which disproportionately divvies out quality schooling experiences to the children of middle- and upper-income parents. Although completing a college degree might actually be the best thing since sliced bread for anyone’s future economic outlook, the reality is that too few kids from low-income families make it to college — never mind complete their studies.
Until the trends depicted in the graphs below change, the American Dream — at least for low-income students — is more like a pipe dream.