Ian Rowe highlights proof that the American Dream remains within reach.
The American dream is still alive and can be achieved in just one generation, even among the most economically disadvantaged young people. That finding is among the most promising takeaways from new research produced by Harvard University’s Raj Chetty and his collaborators. These analysts studied economic outcomes for 57 million children born between 1978 and 1992, whose income was then measured in adulthood at age 27, from 2005 to 2019, and found gains across racial lines.
“Earnings increased for Black children at all parental income levels, reducing white-Black earnings gaps for children from low-income families by 30%,” say the paper’s authors. It is encouraging that the Black-white gap in upward mobility shrank so significantly in just the past 15 years, even though overall racial gaps remain.
While a person’s race matters increasingly less, there are community level characteristics whose absence or presence more directly drive individual prospects of upward or downward mobility. Indeed, this study finds a neighborhood–level factor that principally drives access to the American dream.
Lead researcher Benjamin Goldman explained at a Brookings Institution presentation: “In economics, there is something called a one-factor model where … a single variable seems to fully explain why outcomes have changed differently for different race and class groups over the last 15 years.”
That single variable? The rate of working parents in a given community.
Communities that experienced increases in parental employment had the largest increases in household income for children when they reached age 27, regardless of the employment status of a parent in an individual child’s household.
This is a substantial finding, but not entirely new. Sociologist William Julius Wilson showed in two of his seminal books, “The Declining Significance of Race” and “When Work Disappears: The World of the New Urban Poor,” that unemployment levels within a given community far outweigh race as a determining factor for mobility. In his view, fewer adults in the labor force is a catalyst for many of the social ills that further deteriorate economic opportunity for children.
