NETWORK INSTITUTE October 2830, 2015 Hyatt Regency Cambridge - PowerPoint PPT Presentation

PATHWAYS TO PROSPERITY NETWORK INSTITUTE October 28–30, 2015 Hyatt Regency Cambridge • Cambridge, MA

ECONOMIC IMMOBILITY: ACCIDENTS OF BIRTH, CONSEQUENCES FOR LIFE Nancy Hoffman Jobs for the Future | Pathways to Prosperity Network October 30, 2015 Pathways to Prosperity Network PATHWAYS TO ECONOMIC OPPORTUNITY

WHAT WE KNOW #1 > Income mobility in the U.S. has been remarkably stable since the 1970s. > Levels of mobility were low in the ‘70s and remain so today. > One U.S. study showed that 42% of American men whose fathers were in the bottom fifth of the income distribution remained “stuck” there. In Denmark, Finland, Sweden, Norway, and the UK, the numbers were between 25% and 30%. No more American dream? Pathways to Prosperity Network

STABLITY OF INCOME IMMOBILITY Pathways to Prosperity Network

STUCK AT THE BOTTOM OR “STUCK” AT THE TOP Pathways to Prosperity Network

Pathways to Prosperity Network

Pathways to Prosperity Network

Pathways to Prosperity Network

WHAT WE KNOW #2 > The income gap between low-income families and wealthier families has grown substantially. > A person who is born at the bottom and remains there is further behind financially than ever before because wages have risen for the wealthy and fallen or remained stable for the rest. > Thus, the costs of immobility have risen, because the lifetime difference in earnings between someone born in the bottom quartile versus the top quartile is much greater than it used to be. Pathways to Prosperity Network

THE EQUALITY OF OPPORTUNITY PROJECT Pathways to Prosperity Network

LOWER AND MIDDLE-INCOME PEOPLE STUCK IN PLACE Annual growth rate of real income across the family income distribution, national Pathways to Prosperity Network

WHERE YOU LIVE MATTERS IF YOU ARE LOW-INCOME > Upward mobility varies across areas of the U.S. and over time. > Every year of exposure to a better environment improves a child’s chances of success. > From The Moving to Opportunity experiment, a study of families given vouchers to move to “better” neighborhoods—(Phase 3 of The Equality of Opportunity Project). Pathways to Prosperity Network

MOBILITY OF BOTTOM FIFTH BY GEOGRAPHY Pathways to Prosperity Network

Pathways to Prosperity Network

FACTORS CORRELATED WITH MORE/LESS MOBILITY > Residential segregation (whether by income or race); > Quality of schooling; > Family structure (e.g., how many children live with only one parent); > “Social capital” (such as taking part in community groups); and > Inequality (particularly income gaps among those outside the top 1%). Pathways to Prosperity Network

QUESTIONS TO PONDER “Social mobility is higher in integrated places with good schools, strong families, lots of community spirit, and smaller income gaps within the broad middle class.” Source: The Inequality Project Questions For Us: > Do we know whether quality post secondary credentials are an adequate engine to move young people from the bottom quintile up the economic ladder? > If the answer is no, what should we add to our strategies? Pathways to Prosperity Network

RESOURCES The Equality of Opportunity Project: Harvard http://www.equality-of-opportunity.org Economic Mobility Project: Pew Trusts http://www.pewtrusts.org/en/archived-projects/economic- mobility-project Economic Mobility: Brookings http://www.brookings.edu/research/topics/economic- mobility Pathways to Prosperity Network

NANCY HOFFMAN nhoffman@jff.org TEL 617.728.4446 FAX 617.728.4857 info@jff.org 88 Broad Street, 8 th Floor, Boston, MA 02110 (HQ) 122 C Street, NW, Suite 650, Washington, DC 20001 505 14th Street, Suite 900, Oakland, CA 94612 WWW.JFF.ORG Pathways to Prosperity Network