If there’s one issue on which both the left and right agree, it is the crisis of declining mobility. The American dream at its core is that a person, no matter his or her background, can make it here. A few weeks ago, four economists at Harvard and the University of California at Berkeley released a path-breaking study of mobility within the United States. And last week the Journal of Economic Perspectives published a series of essays tackling the question from an international standpoint. The research is careful and nuanced, yet it does point in one clear direction. The question is, will Washington follow it?
For more than a decade, it has been documented that Northern European countries do better at moving poor people up the ladder than the United States does. Some have dismissed these findings, pointing out that the United States cannot be compared with places such as Denmark, an ethnically homogeneous country of 5.5 million people. But Miles Corak of the University of Ottawa points out in his contribution to the Journal of Economic Perspectives that Canada is a very useful point of comparison, being much like the United States. (The percentage of foreign-born Canadians is actually higher than the percentage of foreign-born Americans, for example.) And recent research finds that people in Canada and Australia have twice the economic mobility of Americans. (The British are about the same as Americans but much worse than Canadians and Australians. )
What’s intriguing is that many of the factors that seem to explain the variation across countries also help explain the variation across the United States. The most important correlation in the Harvard-Berkeley study appears to be social capital. Cities with strong families, civic support groups and a community-service orientation do well on social and economic mobility. That’s why Salt Lake City — dominated by Mormons — has mobility levels that compare with Denmark’s. This would also explain why America in general fares badly; the United States has many more broken families, single parents and dysfunctional domestic arrangements than do Canada and Europe.
The other notable feature in the Harvard-Berkeley study is the design of cities. Places that are segregated — where the poor live far from the middle class — do much worse than those that are more mixed. This probably has to do with geography; it’s hard to get to jobs when they are far away. It also might mean that people in poor neighborhoods end up in a self-reinforcing cycle of under-funded schools, high crime and social breakdown. A related finding is that places with high African American populations show low mobility for the white population living there as well. The economist Jeffrey Sachs suggested to me that this could be explained by the fact that in areas where there are substantial minority populations, people often resist making large public investments, which might turn out to hurt everyone who lives in the area.
In any event, these factors, while important, might be difficult to change in any reasonable period of time. Social capital cannot be built in five years. Cities cannot be quickly redesigned to be integrated or create greater density. That leaves the last large factor in explaining the low mobility: public policy. And here, Corak explains, the United States is the great outlier. Simply put, the United States spends much less on the education and well-being of poor people, especially poor children, than any other rich country — and that retards their chances of escaping poverty.
A recent report by the Organization for Economic Cooperation and Development points out that the United States is one of only three rich countries that spends less on disadvantaged students than on other students — largely because education funding for elementary and secondary schools in the United States is tied to local property taxes. By definition, poor neighborhoods end up with badly funded schools. In general, the United States spends lots of money on education, but most of it is on college education or is otherwise directed toward those already advantaged in various ways.
There is debate about the effectiveness of certain early education programs such as Head Start. It may be that providing help to “at-risk families” — treating drug-addicted mothers for example — has a bigger impact on children than a specific enrichment program. Though, clearly, most of us believe that these enrichment programs work. Corak points out that the well-off in the United States spend nearly $9,000 a year on books, computers, child care and summer camps — nearly seven times what families in the bottom fifth of earners spend. In fact, this is part of what makes mobility low.
In any event, what’s apparent is that countries — and most parts of the United States — that invest heavily in all their children’s health care, nutrition and education end up with a much stronger ladder of opportunity and access. And that’s something we can change. So if we want to restore the American dream, we now have the beginnings of a path forward.