Linda Chavez
President Barack Obama and the Democrats have decided "income inequality" is the major domestic issue confronting Americans. But a new study by liberal economists challenges many of the president's and his political allies' assumptions about the growing gap between rich and poor.

"Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States," published this week by the National Bureau of Economic Research, debunks shibboleths of both the left and the right. Conservatives often assert that economic mobility is greater in the U.S. than it is almost anywhere in the world, but the data don't support it. There is greater mobility in many other nations than there is in the U.S. -- the Scandinavian countries, Canada and Australia, for example. But liberals are wrong about whether it is more difficult now than in the past for Americans to move up the income ladder, according to the study. Moreover, there is substantial variation in economic mobility based on a variety of geographic factors.

The researchers of the new study examined income data from tax records for more than 40 million American parents and children, allowing them to look at changes in income for individuals over time, not just aggregate statistics. (The data set redacted names to protect individual privacy.) As a result, they could link a child's later income to that of his or her parents, allowing them to show actual mobility for individuals between 1996 and 2012. What they found was contrary to the mantra that economic mobility is declining.

A child born in 1971 into the bottom 20th percentile had about an 8 percent chance of eventually moving into the top fifth of earners, and a child born in 1986 had about a 9 percent chance, so there was little change in overall mobility over the course of the study.

But the chances of moving up the economic ladder depend on a variety of factors, including some surprising ones. The study's authors found tremendous variation in intergenerational mobility based on geography. Children born in cities such as San Jose, Calif., and Salt Lake City had very high degrees of upward mobility -- comparable to those born in countries such as Denmark. But kids born in places such as Charlotte, N.C., and Milwaukee had about half the national rate of economic mobility.

When the researchers delved deeper to see what might explain these geographic variations, they found that areas with large populations of African-Americans had lower mobility. Though that finding won't surprise anyone, what was surprising was that whites who lived in those communities with large African-American presences also experienced lower rates of upward mobility.

Linda Chavez

Linda Chavez is chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics .

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