New research from Opportunity Insights, a non-partisan, not-for-profit at Harvard University, shows that younger Americans are having a hard time rising out of the financial situation they were born into. However, upward mobility is more common in certain cities than others.
Opportunity Insights collected data on 57 million children born in the U.S.
“For white children in the U.S. born between 1978 and 1992, earnings increased for children from high-income families but decreased for children from low-income families, increasing earnings gaps by parental income (‘class’) by 30%,” said Opportunity Insights. “Earnings increased for Black children at all parental income levels, reducing white-Black earnings gaps for children from low-income families by 30%. Class gaps grew and race gaps shrank similarly for non-monetary outcomes such as educational attainment, standardized test scores, and mortality rates.”
While earnings increased for Black children, Axios said that Black children born in 1992 were still not as likely to rise out of their financial conditions than white children in nearly every county in America. It said that’s because initial Black-white disparities were already large.
With data from Opportunity Insights, Axios developed lists of the cities where it has been most likely for new generations of Americans to become stronger economically and where it has been least likely.
Here’s the top five cities where income increased across generations, based on household income at age 27:
Brownsville, Texas
Austin, Texas
Charlotte, N.C.
Nashville, Tenn.
Grand Rapids, Mich.
Here’s the five cities where income decreased the most across generations, based on household income at age 27:
Tampa Bay, Fla.
Washington, D.C.
San Diego, Calif.
Las Vegas, Nev.
Philadelphia, Pa.
“Children’s outcomes are most strongly related to the parental employment rates of peers they are more likely to interact with, such as those in their own birth cohort, suggesting that the relationship between children’s outcomes and parental employment rates is mediated by social interaction,” said Opportunity Insights. “Our findings imply that community-level changes in one generation can propagate to the next generation and thereby generate rapid changes in economic mobility.”
Axios noted that the notion that younger generations have chances to better financially than their parents is “core to the American dream,” even as it becomes more elusive for many. In fact, Americans born into low-income families in 38 of the biggest metro areas of the country during 1992 were doing worse than Americans born in 1978 at the same age (27).
Opportunity Insights’ research covered people born into the Gen X (1965 to 1980) and millennials (1981 to 1996) generations. Other research indicates that Gen Zers (born between 1997 and 2012) are also facing financial struggles. This May, Audacy reported that people in this generation were “digging themselves into a ditch of debt by tapping into credit at higher levels than their millennial counterparts did in the early stages of adulthood.”