How can we improve economic opportunities for our children?

The Equality of Opportunity Project uses big data to identify new pathways to upward mobility.

The Fading American Dream

Percent of Children Earning More than their Parents, by Year of Birth
Absolute Mobility by Cohort

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This figure plots the fraction of children earning more than their parents ("absolute mobility") by the year in which the child was born. Children’s and parents’ pre-tax incomes are measured at approximately age 30 at the household level, adjusting for inflation using the Consumer Price Index.


Children's prospects of achieving the "American Dream" of earning more than their parents have fallen from 90% to 50% over the past half century. This decline has occurred throughout the parental income distribution, for children from both low and high income families, as shown in the chart below.

Percent of Children Earning More than their Parents

1940 vs. 1980 Birth Years, by Parent Income Level
Absolute Mobility by Parent Income Percentile

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This figure plots the fraction of children earning more than their parents ("absolute mobility") by parent income percentile for children born in 1940 and 1980 (solid curves). The dashed lines present hypothetical scenarios illustrating how absolute mobility for the 1980 cohort would change with higher or more broadly shared GDP growth. The pink dotted line plots the rates of absolute mobility that the 1980 cohort would have experienced had GDP grown at 2.5% annually from 1980-2010 instead of the actual rate of 1.5%. The green dotted line plots the rates of absolute mobility that the 1980 cohort would have experienced had GDP in 2010 been allocated in the same manner across households as it was for children born in 1940.


Most of the decline is due to the more unequal distribution of economic growth in recent decades rather than the slowdown in GDP growth. Increasing economic growth rates to the higher levels experienced in mid-century America would increase the fraction of children earning more than their parents to 62%. Spreading the existing growth more broadly across the income distribution would raise the level to 80%.

The American Dream continues to thrive in some parts of the country. As the map below shows, chances of rising out of poverty vary widely across cities in America for children born in the 1980s.


The Geography of Upward Mobility in America

Children's Chances of Reaching Top 20% of Income Distribution Given Parents in Bottom 20%
Childhood Exposure Effects

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This map shows rates of upward mobility for children born in the 1980s for 741 metro and rural areas ("commuting zones") in the U.S. Upward mobility is measured by the fraction of children who reach the top fifth of the national income distribution, conditional on having parents in the bottom fifth. Lighter colors represent areas with higher levels of upward mobility.


The differences in upward mobility across areas are caused by differences in childhood environment. Every year of exposure to a better environment improves a child’s chances of success, based on an experimental study of housing voucher recipients and a study of five million families who moved across areas, illustrated in the chart below.

Gain from Moving to a Better Neighborhood

By Child's Age at Move
Childhood Exposure Effects

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This figure plots the percentage gain from moving to a better area by the age at which the child moves, based on an analysis of 5 million families who moved across metro areas in the U.S. For example, children who move at age 9 have outcomes that are about 50% between the outcomes of children who grow up permanently in the origin and destination areas. Those who move at later ages get less of a gain from moving to a better area.


The fading of the American Dream is not immutable. There are cities throughout America — such as Salt Lake City and Minneapolis — where children's chances of moving up out of poverty remain high. Cities with high levels of upward mobility tend to have five characteristics: lower levels of residential segregation, a larger middle class, stronger families, greater social capital, and higher quality public schools.

We continue to study what policies can promote upward mobility and provide data to help others join in the effort to revive the American Dream.