Newly available data show that there is substantial economic mobility, but also lingering inequality, with American Indian and Black children tending to achieve worse economic outcomes than children from other races who have parents at the same income level. This is a concern for anyone who cares about the economy, because intergenerational economic mobility shapes the economy’s overall productive capacity. This article describes the key patterns and determinants of economic mobility in the U.S. The evidence suggests that public investments in lower-income children have the potential to not only improve outcomes for those children, but also generate positive externalities for government budgets and the economy in general.
This article appeared in the Third Quarter 2023 issue of Economic Insights. Download and read the full issue.View the Full Article