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Tuesday, January 28, 2014

Mobility Has Remained Flat, Contrary to Obama’s Claims -- Economic mobility of children varies by geographic area -- By Daniel Wiser, The Washington Free Beacon

The economic mobility of children in America has remained relatively flat in the last three decades and varies widely by geographic area, according to two new studies that disrupt President Barack Obama’s message that income inequality has increased ahead of his State of the Union address.

One study found that the ability of the poorest children to move up the economic ladder has slightly increased. Children born in 1971 to parents in the bottom fifth of the income distribution had an 8.4 percent chance of reaching the top fifth of the income distribution, while that percentage ticked up to 9 percent for children born in 1986.

The other study found that both the absolute mobility of children and their relative mobility based on the income status of others largely depends on where they live. Family structure, racial and economic segregation, school quality, social capital, and income inequality were the main factors correlated with mobility in different areas, according to the study.

Harvard University economist Raj Chetty and others conducted the research as part of the “Equality of Opportunity Project,” funded by the National Science Foundation and other university programs.

The recent findings complicate Obama’s narrative about the pitfalls of rising income inequality as he prepares to deliver his annual speech on Tuesday. The president called inequality “the defining challenge of our time” during a speech last month, saying “The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American dream.”

However, the studies indicate that mobility has not changed that much in the last few decades. And income disparities among the top 1 percent of earners, the kind of inequality that has risen most dramatically in recent decades, is less important than “middle-class inequality,” the studies’ authors note.

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