America Needs More Economic Mobility

Although the growth of income inequality has received lots of public attention in recent years, public policy should focus instead on expanding economic opportunity. Of the numerous advantages of concentrating on opportunity, two stand out. One is public support. Americans are less concerned about inequality than economic opportunity. The popular reading of the American Dream is not that America guarantees success to all, but that America tries to ensure equal opportunity so that hard work and initiative pay off. The second advantage is that new legislation will be more likely to win support if it is framed in a way that is popular with both political parties. In our new book, Creating an Opportunity Society, we lay out an agenda of policies aimed at improving education, encouraging work, and strengthening families. We argue that this opportunity-enhancing agenda is one that most people, regardless of political affiliation, can endorse.

Some might think that America already presents people with lots of opportunity to get ahead. But it turns out that you need to pick your parents well. True, there is considerable mobility from one generation to the next, but the American economy tends to help those at the top stay there while making it difficult for those at the bottom to move up. Kids from families in the bottom 20 percent of the income distribution are nearly five times as likely to wind up in the bottom 20 percent as kids from families in the top 20 percent. Similarly, children from other advanced countries are less likely to be stuck at the bottom of the income distribution than children in the U.S.

There is almost universal agreement that education is the key to economic success. Most people know that the family income of those who drop out of school falls far below the family income of those who complete college. Less well known is the fact that the income of those with less than a college degree has not increased for three decades or more. Promoting education is promoting opportunity.

Our research shows that children whose parents were in the bottom 20 percent of earners tripled their odds of earning $85,000 or more per year by obtaining a four-year college degree. Yet kids from poor families are both less likely to enroll in and graduate from college as compared with kids from families with more income.

What can we do to help more disadvantaged children get into college? The most important goal should be to improve their readiness for college coursework by improving their mastery of reading and math skills during the K-12 years. Because research shows that disadvantaged children fall behind in their intellectual development by age three, the focus on learning should begin in the preschool years. The results of a recent scientific evaluation of Head Start raise considerable doubt about whether it boosts school readiness. But the record of preschool programs funded and run by states seems much better than Head Start. Given their success, states should be given a bigger role in using Head Start funds.

The nation has devoted great attention and funding over recent decades to improving K-12 education. The Obama administration is now proposing to amend the No Child Left Behind law, in part by broadening and strengthening its accountability system. The national standards in English and math recently recommended by governors and school superintendents are also a step in right direction. To help students meet these standards we need better teachers along with more orderly classrooms, goals that some charter schools have begun to achieve. The emphasis on accountability, higher standards, and better teachers has put us on the right track to increased school achievement and preparation for post-secondary education.

The process of preparing for and applying for college is too complex. In 2009, about $170 billion in government and private funds were available to help students pay for college, with a considerable share – though not enough – of the money available to students from low-income and minority families. To inform parents while their children are still young that financial aid will be available when their children reach college age, the IRS, based on tax return data, should send annual letters to low-income parents informing them about the amount of money for which their children could qualify to help with college costs, In this way, both parents and children can begin early to prepare for college attendance. Schools should counsel students beginning in middle school about the courses they need to prepare for college and to help them select an appropriate school and apply for financial aid. The 127-question federal form students must complete to apply for financial aid is far too long and confusing. Research shows that applications by low-income youngsters increase when the burden of figuring out the complex application procedure is lifted. The form should be sliced to no more than one page

The strength of these proposals is that nearly all of them are backed by strong research showing that they can individually have positive impacts on the education of disadvantaged kids. Taken together, they can be expected to move the nation closer toward fulfilling our commitment to providing a level playing field for all and substantially increasing opportunity in America.