Changes in children’s social environments have increased class gaps and reduced racial gaps in economic mobility

What’s the issue?

Children’s prospects of achieving upward economic mobility vary substantially across geography and demographic groups in America. Prior research has shown that present-day differences in economic mobility can be traced in part to historical factors such as rates of slavery in the 1860s and red-lining in credit lending beginning in the 1930s. Given the long shadow cast by history, is economic opportunity largely fixed by historical policies or can opportunity change in shorter, more policy-relevant time frames?

A recent study from Harvard University’s Opportunity Insights analyzes changes in economic opportunity using new data on 57 million children born between 1978 and 1992 from anonymized Census and tax records. Although substantial racial gaps persist, the researchers find rapid changes in the size of these gaps. Over the past 15 years, for example, the Black-white gap in upward economic mobility shrank by 27%. During the same period, class gaps expanded, with the difference in incomes between white children growing up in low- and high-income families increasing by 28%. Further analysis reveals that these trends were driven by changes in the social environments in which children grew up. The team’s findings show that opportunity is malleable in short time frames and provide new insights and data to expand opportunity going forward.

This research was carried out by Harvard University Professor Raj Chetty, the director of Opportunity Insights; Harvard Kennedy School Professor of Public Policy Will Dobbie; Cornell University Assistant Professor Benjamin Goldman; Sonya R. Porter from the U.S. Census Bureau; and Harvard Law School Professor Crystal S. Yang.
 

What does the research say?
 

• The Black-white gap in upward mobility shrank significantly in the past 15 years, although racial gaps remain wide. At the same time, gaps in white children’s outcomes by parental income grew.
• The geography of opportunity has shifted in America: The coasts, which have historically provided more pathways to upward mobility than other regions, no longer do so. Additionally, in areas where Black children’s outcomes improved the most, white children also did relatively better.
• Divergent trends in mobility by race and class were driven by changes in the communities in which children grew up, as measured by parental employment rates.
• Social interactions are central to changing opportunity: Children’s outcomes are shaped by the parental employment rates of peers with whom they interact most.