The idea that birth should not be destiny animates the idea of the American Dream. Growing evidence for huge race gaps in intergenerational mobility – both up and down – shows that not only is birth too often destiny, so too is race. (Evidence from us, from Raj Chetty’s Opportunity Insights team, and from Bhashkar Mazumder at the Chicago Fed).
Intergenerational mobility can be measured in a number of ways, of course: using income, wages, wealth, health, education, just to name a few of the metrics preferred by different scholars. Mobility can also be measured in absolute terms (are you better off than your parents were at the same age) or relative terms (what rung of the ladder are you on compared to your parents). We focus here on race gaps in relative intergenerational income mobility. But even intergenerational mobility in relative terms can be measured in many different ways, as we have shown here and here. One common way to measure relative intergenerational mobility is through a “quintile transition matrix”. These figures divide the income distribution into five equal bins—quintiles—and show how likely it is for a child from one quintile to end up in the same or another quintile in adulthood. These are also known as conditional transition probabilities (CTP). If you are a regular on these pages you’ll know what we’re talking about, but just in case:
a new presentation of mobility data
Here then we show how far, and in which direction, real-life CTPs differ from a perfectly random distribution: what we label here a Mobility Utopia. (To be clear, we do not think a society like this would be utopian in practice, given the policies that would likely be required). Using data from Opportunity Insights (the same as used in the chart above), we first show CTPs for whites. White children from the first quintile are nine percentage points more likely to end up in the first quintile as adults than in the Mobility Utopia (29 percent vs. 20 percent). So poor white children are 45 percent more likely to stay poor than they should be. Conversely, white children from the top income quintile are 21 percentage points more likely to stay in the top quintile as adults compared to random (41 percent v. 20 percent). That is, rich white kids are more than twice as likely to stay rich as adults than they should be.
Black immobility across generations
The results for black children, however, are strikingly different. Black children in the first income quintile are 17 percentage points more likely to stay in the first income quintile as adults compared to random—nearly twice the chance of poor white children. Conversely, rich black children do not have the same advantages as rich white children. Black children from the top income quintile are in fact two percentage points less likely to stay in the top quintile compared to random. While white children at the top have a substantial glass floor to help them stay at the top, the chances of black children staying at the top are less than random.