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The Next Economy

From Rags to Riches

Just 4 percent of Americans born to the bottom fifth of households reach the top of the income spectrum

photo of Peter Bell
September 28, 2012

Chutes and Ladders

The American Dream promises equality of opportunity. But decades-long studies of families show unequal prospects for rising above–or falling below–one’s parents’ station in life. Things are especially unchanging for those who grow up in the poorest fifth and the richest fifth of households. Forty percent of the children of parents in those groups remain in those groups as adults.

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Inequality Surges

Why is social mobility low? Rising income inequality is one explanation. The rich and the poor have grown further apart over the past 40 years.


As this occurred, other gaps have widened. Among the starkest is educational attainment. High-income children are much more likely to graduate from college than low-income children are–more so now than 30 years ago.



The wages of adult Americans with a college degree have risen steeply compared with those without one. Lacking a college degree makes it hard to get ahead.




The College Difference

A college degree dramatically improves have-nots’ chances of reaching the middle– and upper–income brackets as adults. Armed with college degrees, half of children born into the lowest income bracket reach the middle quintile or higher.


Sources: Census Bureau; Pew Economic Mobility Project; University of Michigan professors Martha J. Bailey and Susan M. Dynarski

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