Half of Black children born in the bottom 20 percent (quintile) of incomes will remain there, versus 25 percent for Whites. A person born in that same income quintile, and who graduates college, has a 16 percent chance of staying in that lowest group, while a person born in the highest income quintile who fails to graduate high school still has a 14 percent chance of remaining in the top 20 percent of incomes.
This is what social mobility looks like in America today, according to a paper recently presented at the Federal Reserve Bank of Boston’s annual conference by Richard Reeves and Isabel Sawhill. The paper summarizes current research on the issue and presents its own analysis of current data to lay bare the point that for too many Americans, the income level into which they are born is where they are likely to stay – regardless of effort.
The picture was particularly bleak in terms of race. “Black children face pervasive downward pressure towards the bottom of the income distribution, regardless of parent income,” write the researchers. “Half the Black children born into the bottom quintile remain there in adulthood, compared to just one in four Whites. Only 3 percent join the top income quintile, implying that a real-life ‘rags to riches’ story is unlikely for Black children.”
The researchers also looked at five policy interventions, such as preschool during early childhood or programs designed to improve reading skills in the elementary years, and found that the cumulative effect of the five makes a big difference in narrowing the achievement gap by age 40 between those born poor and those born affluent, from a 20 percent gap to a 6 percent one, a 14-point difference.
The effects of those policies on the Black-White success rate gap by age 40 were not quite as dramatic, reducing a considerable gap of 35 percent by only seven points, leaving a still considerable 28-point gap.
The researchers estimated that the five interventions they considered have an approximate cost of $20,000 per child, an investment that yields a $200,000 increase in the lifetime income of the average beneficiary.