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Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States

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  • Raj Chetty
  • Nathaniel Hendren
  • Patrick Kline
  • Emmanuel Saez

Abstract

We use administrative records on the incomes of more than 40 million children and their parents to describe three features of intergenerational mobility in the United States. First, we characterize the joint distribution of parent and child income at the national level. The conditional expectation of child income given parent income is linear in percentile ranks. On average, a 10 percentile increase in parent income is associated with a 3.4 percentile increase in a child's income. Second, intergenerational mobility varies substantially across areas within the U.S. For example, the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4% in Charlotte but 12.9% in San Jose. Third, we explore the factors correlated with upward mobility. High mobility areas have (1) less residential segregation, (2) less income inequality, (3) better primary schools, (4) greater social capital, and (5) greater family stability. While our descriptive analysis does not identify the causal mechanisms that determine upward mobility, the publicly available statistics on intergenerational mobility developed here can facilitate future research on such mechanisms.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19843.

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Date of creation: Jan 2014
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Handle: RePEc:nbr:nberwo:19843

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  1. Adam Thomas & Isabel Sawhill, 2002. "For richer or for poorer: Marriage as an antipoverty strategy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(4), pages 587-599.
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  7. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood," American Economic Review, American Economic Association, American Economic Association, vol. 104(9), pages 2633-79, September.
  8. Chul-In Lee & Gary Solon, 2006. "Trends in Intergenerational Income Mobility," NBER Working Papers 12007, National Bureau of Economic Research, Inc.
  9. Laura Chadwick & Gary Solon, 2002. "Intergenerational Income Mobility Among Daughters," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 335-344, March.
  10. Patrick Kline & Andres Santos, 2013. "Sensitivity to missing data assumptions: Theory and an evaluation of the U.S. wage structure," Quantitative Economics, Econometric Society, Econometric Society, vol. 4(2), pages 231-267, 07.
  11. Grawe, Nathan D., 2006. "Lifecycle bias in estimates of intergenerational earnings persistence," Labour Economics, Elsevier, Elsevier, vol. 13(5), pages 551-570, October.
  12. Philip Oreopoulos, 2003. "The Long-Run Consequences Of Living In A Poor Neighborhood," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(4), pages 1533-1575, November.
  13. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
  14. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez & Nicholas Turner, 2014. "Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility," NBER Working Papers 19844, National Bureau of Economic Research, Inc.
  15. Gary Solon, 2002. "Cross-Country Differences in Intergenerational Earnings Mobility," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(3), pages 59-66, Summer.
  16. Debraj Ray, 2010. "Uneven Growth: A Framework for Research in Development Economics," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 24(3), pages 45-60, Summer.
  17. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 9(1), pages 1-24, January.
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Cited by:
  1. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez & Nicholas Turner, 2014. "Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility," American Economic Review, American Economic Association, American Economic Association, vol. 104(5), pages 141-47, May.
  2. Herbst, Chris M. & Lucio, Joanna, 2014. "Happy in the Hood? The Impact of Residential Segregation on Self-Reported Happiness," IZA Discussion Papers 7944, Institute for the Study of Labor (IZA).
  3. Sarah Cohodes & Samuel Kleiner & Michael F. Lovenheim & Daniel Grossman, 2014. "The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions," NBER Working Papers 20178, National Bureau of Economic Research, Inc.
  4. Jacob Fishman & V. Kerry Smith, 2013. "A Direct Test of the “Explanation” for Incomplete Stratification in Vertical Sorting Models," NBER Working Papers 19387, National Bureau of Economic Research, Inc.

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