Politics & Policy

Leading Economic Indicator

As President Obama turns his attention to the very broad category of economic inequality, the more complex — and arguably more important — question of economic mobility flies under the political radar. The main questions related to economic mobility are: 1) How likely are the children of less-well-off families to improve on their situation as adults? And 2) What conditions help or hinder upward mobility? A National Science Foundation study led by economists from Harvard and Berkeley has taken a deep and wide look at the subject, analyzing the economic outcomes of all Americans born between 1980 and 1982 as they entered the fourth decades of their lives.

Many of their findings will prove unsurprising to those who have followed the issue. Non-whites experienced less upward mobility than did whites, but race seems to have an effect at the community as well as the individual level: Whites residing in largely non-white communities experienced less mobility too. Community specifics matter a great deal: Those reared around Salt Lake City and San Jose had rates of economic mobility matching those of such international leaders as Denmark, while those growing up around Atlanta and Milwaukee fell off the bottom of the chart. Schools matter, and civil society matters — areas with high rates of religious observance and participation in civic groups enjoyed greater economic mobility.

But what matters most is family.

“The strongest predictors of upward mobility are measures of family structure,” the report finds, “such as the fraction of single parents in the area. As with race, parents’ marital status does not matter purely through its effects at the individual level. Children of married parents also have higher rates of upward mobility if they live in communities with fewer single parents.”

Which is to say that, when it comes to economic mobility, there’s a lot more than economics at work. Many things can be achieved through such measures as reforming tax and regulatory laws, loosening the public-school cartels, and making resources available for the benefit of children in difficult circumstances. For individuals, economic setbacks can be reversed, and poor economic decisions can be revisited — going back to school, entering a different career. But being a single mother is not something that can easily be reversed, and being born into a single-mother family — or into a community full of fractured families — is something that children have no say in at all. Taxing and spending matter, but how we live in our families and in our communities matters profoundly more.

Those of us who worry publicly about the rise of single-mother families, out-of-wedlock childbirth, the decline of marriage, and the like are occasionally regarded as prudish old moral scolds, but it is a fact that one of the most important economic questions of our time — arguably the most important — is deeply and inseparably bound up with those social concerns. If you would build the economy, you must build the family first.


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