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The Opportunity Ecosystem Shared Prosperity and Equal Opportunity in Kalamazoo

Richard V. Reeves Senior Fellow, Economic Studies

Policy Director, Center on Children & Families The Brookings Institution

April 30, 2015

2

What is the American Dream? Horatio Alger’s version

“In this free country poverty in early life is no bar to a man’s advancement. … Save your money, my lad, buy books, and determine to be somebody,” Mr Whitney to ‘Ragged Dick’, 1868

3

Bipartisan Agreement on Mobility

“A dangerous and growing inequality and lack of upward mobility…has jeopardized middle-class America’s basic bargain -- that if you work hard, you have a chance to get ahead. I believe this is the defining challenge of our time…” President Obama, Dec 4th, 2013

4

Bipartisan Agreement on Mobility

“Upward mobility is the central promise of life in America: but America’s engines of upward mobility aren’t working the way they should.” Rep. Paul Ryan, Jan 13th, 2014

5

What is the American Dream?

• Shared prosperity? • Rising living standards? • Absolute mobility? • A strong middle class? • No poverty? • Fair treatment? • Meritocracy? • High rates of relative mobility?

6

US: Absolute Mobility Share of American children whose family income exceeds their parents’ family income

Source: Economic Mobility Project. 2012. Pursuing the American Dream: Economic Mobility Across Generations. Washington: The Pew Charitable Trusts.

93%

86%

88%

85%

70%

84%

0% 20% 40% 60% 80% 100%

Raised in Bottom Quintile

Raised in Second Quintile

Raised in Middle Quintile

Raised in Fourth Quintile

Raised in Top Quintile

All Adult Children

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US: Relative Mobility Income Quintile Transition Matrix, US overall

Source: Author’s calculations.

36%

22% 17% 15% 11%

24%

23%

21% 18%

14%

18%

20%

22% 20%

20%

13%

17% 21%

23%

26%

10% 17% 19% 23%

30%

0%

100%

Q1 Q2 Q3 Q4 Q5

Income Quintile at Birth

Top Q at 40

Middle Q at 40

Bottom Q at 40

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My Version of the American Dream, In Lego…

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The Opportunity Ecosystem: Four Interacting Factors

• Family – stability, parenting • Education – achievements and skills • Race – especially poor black mobility • Geography – metros and neighborhoods

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Family: Marriage is Better

Note: The sample size is too small to calculate a matrix for those born in the top two income quintiles. Source: Author’s calculations.

Never-Married Mothers

50%

35% 38%

24%

27% 21%

13%

19% 21%

9% 12% 14%

5% 7% 7%

0%

100%

Q1 Q2 Q3 Q4 Q5


Top Q at 40

Middle Q at 40

Bottom Q at 40

17% 16% 11% 13% 10%

23% 21%

19% 17% 13%

20% 19%

23% 21%

21%

20% 20% 24%

24% 27%

19% 25% 22% 26% 30%

0%

100%

Q1 Q2 Q3 Q4 Q5


Top Q at 40

Middle Q at 40

Bottom Q at 40

Continuously-Married Mothers

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54%

42% 37%

48%

16%

26%

30% 34%

29%

35%

13%

16% 18%

2%

30%

5% 8% 7%

2%

5%

1% 4% 4% 2% 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bottom Quartile Second Third Fourth Top Quartile


Top Quartile atage 40

Fourth

Third

Second

Bottom Quartileat age 40

Note: Small sample size for high school graduates reaching the top quintile Source: Author’s calculations.

Education: No High School

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30%

19% 17% 13% 11%

24%

25% 21%

20% 16%

18%

21% 24%

22%

21%

16%

19% 20%

24%

26%

12% 16% 18% 21% 25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%




Fourth

Third

Second

Bottom Quartileat age 40

Education: High School Graduate


13

16% 11% 9% 10% 11%

17%

14% 17% 13% 9%

26%

20% 18% 18% 17%

21%

21% 28%

25% 26%

20%

35% 28%

33% 37%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%




Fourth

Third

Second

BottomQuartile at age40

Education: College Graduates


14

Income Gaps in Higher Education Fraction of students completing college (top quartile projected)

Source: Author’s tabulations and Martha J. Bailey and Susan M. Dynarski, “Inequality in Postsecondary Education,” in Whither Opportunity? Rising Inequality, Schools, and Children’s Life Chances, edited by Greg Duncan and Richard Murnane (New York: Russell Sage Foundation, 2011), p. 117-132.

0.05

0.14

0.17 0.09

0.21

0.32

0.24

0.44

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Lowest Quartile 2nd Quartile 3rd Quartile Highest Quartile

1961-1964 birth cohorts


1961-1964 OLS projection


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Income Gaps in Higher Education Fraction of students completing college, (top quartile actual)

Source: Author’s tabulations and Martha J. Bailey and Susan M. Dynarski, “Inequality in Postsecondary Education,” in Whither Opportunity? Rising Inequality, Schools, and Children’s Life Chances, edited by Greg Duncan and Richard Murnane (New York: Russell Sage Foundation, 2011), p. 117-132.

0.05

0.14

0.17

0.36

0.09

0.21

0.32

0.54

0.24

0.44

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Lowest Quartile 2nd Quartile 3rd Quartile Highest Quartile





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Race: Black v White Mobility Social Mobility Matrices by Race

Note: The sample size is too small to calculate a matrix for those born in the top income quintile. Source: Author’s calculations.

Black Americans White Americans

51% 40%

32% 22%

27%

26% 37%

26%

12%

18% 16%

22%

7% 11% 6%

19%

3% 6% 8% 10%

0%

100%

Q1 Q2 Q3 Q4 Q5


Top Q at 40

Middle Q at 40

Bottom Q at 40

23% 15% 14% 14% 10%

19% 22% 20% 17%

12%

23%

21% 23% 21%

19%

19%

21% 23% 24%

27%

16% 22% 21% 24%

32%

0%

100%

Q1 Q2 Q3 Q4 Q5


Top Q at 40

Middle Q at 40

Bottom Q at 40

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Metro Mobility: Variation Within US Relative Mobility: Rank-Rank Slopes by CZ

Source: Chetty, Raj, et al. 2014. “Where is the Land of Opportunity: The Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics (forthcoming).

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Metro Mobility: Correlates

“The spatial variation in intergenerational mobility is strongly correlated with five factors: (1) residential segregation, (2) income inequality, (3) school quality, (4) social capital, and (5) family structure.” - Chetty

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Up to the Top? Bottom to Top Income Quintile Mobility, all CZs

20

Up to the Top? Bottom to Top Income Quintile Mobility, CZs 400k-600k

21

College Bound? Probability Child Born at the 25th Percentile of the Income Distribution Goes to

College (all CZs, c. 2003)

22

College Bound? Probability Child Born at the 25th Percentile of the Income Distribution Goes to

College (all Medium CZs, c. 2003)

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Relative College Graduation Rate (Income Adjusted)

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Black Population (% CZ)

25

Single Mothers (% Children)

26

Religiosity (%)

27

So What? The O’Keefe Approach

• Select • Simplify • Amplify

29

Case Study 1: The UK

• The Government’s focus is on improving inter-

generational relative social mobility:

See download.cabinetoffice.gov.uk/social-mobility/opening-doors-breaking-barriers.pdf

“A fair society is an open society, one in which every individual is free to succeed. That is why improving social mobility is the principal goal of the Government’s social policy” – Opening Doors, Breaking Barriers Executive Summary, April 2011

30 Five Principles for Social Mobility

A long-term view

A progressive approach

Government does not have all the answers

A ruthlessly evidence based approach

A life-cycle approach

Social mobility is, by definition, a long-term challenge. The Government’s investment and policy decisions will reflect that. There are no quick fixes.

Resources will be focused on those from disadvantaged backgrounds while narrowing opportunity gaps all the way up the income scale

Improving social mobility requires the whole of society to play its part. The strategy challenges Government and wider society to do better, supported by greater accountability and transparency

Effort and finance will be channelled in the ways that evidence tells us makes most difference to social mobility – particularly essential in a time of fiscal constraint where we must do more with less

Policies need to impact across the life-cycle to make a difference – from the Foundation Years, through school life and the key transitions from education into the working world

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Leading Indicators of Success

Indicator Sub-indicators Department

1. Low Birth Weight Low Birth Weight (disadvantage gap) DH

2. Child Development Child development at age 2½ (TBC) DH

Gap in school readiness at age 5 DfE

3. School Attainment Attainment of Level 4 at KS2 (FSM gap) DfE

Attainment of “the basics” at GCSE (FSM gap) DfE

Attainment of “the basics” at GCSE (deprived school gap) DfE

Attainment by 19 of children in state and independent schools (AAB at A level) DfE

4. Employment and participation in education (age 18-24)

18-24 year olds participating in (full or part-time) education or training (disadvantage gap) BIS

18-24 year olds not in full-time education or training who are workless (disadvantage gap) DWP

5. Further Education Percentage achieving a level 3 qualification by age 19 (FSM gap) DfE

6. Higher Education Progression of pupils aged 15 to HE at age 19 (FSM gap) BIS

Progression of pupils to the 33% most selective HE institutions (state/independent school gap) BIS

Destinations from higher education (disadvantage gap) BIS

7. Social Mobility in Adulthood

Access to the professions (disadvantage gap) BIS/DWP

Progression in the labour market (wage progression) BIS/DWP

Second chances in the labour market (post-19 basic skills) BIS/DWP

33 Mobility: A Policy Architecture

Commitment to Goal

Definition & Measurement

Institutional Accountability

Executive Sponsorship

* High-level, clear commitment to mobility as target ie. “improving social mobility is the principal goal of the Government’s social policy”

• Clarity on definition: ie. Intergenerational, relative mobility by income and occupation • Support for data to measure long-term trends: Government support for the 2012 birth cohort study (following Millenium Cohort Study of 2000) • Seven ‘leading indicators’ of mobility & sub-indicators, published annually

• Creation of statutory, independent Commission on Social Mobility & Child Poverty, reporting annually to Parliament “on the progress being made by government and wider society in improving social mobility…” • Commission undertaking issue-specific reports (ie. HE access, professions) • Chaired by senior Labour figure (Alan Milburn, ex-Cabinet Minister)

• Standing Ministerial Group on Social Mobility, Chaired by DPM •‘Social Mobility’ test on all new policies or policy changes •APPG on Social Mobility, All-Party

34

Case Study 2: Colorado Opportunity Project

• Goal: “Increasing the proportion of adults--particularly from disadvantaged circumstances--who are middle class by middle age. (Family Income of 300% FPL or higher at age 40)”.

• Indicators at each life stage (cf SGM) • ‘Will make history’ – Gov. Hickenlooper (March,

2015)

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Model/Goal Life Stage & Social Genome Indicators

Opportunity Indicators

Colorado Opportunity Project Goal: Increasing the proportion of adults – particularly form disadvantaged circumstances – who are middle class by middle age (Family Income of 300% FPL or higher at age 40)

Family Formation (from conception through childbirth) Born at a normal birth weight, to a non-poor, married mother with at least a high school diploma

Rate of low birth weight Percent FPL/family income Feeling down, depressed, or sad (maternal depression) Single or dual household parenting Unintended pregnancy (intendedness vs. unintendedness)

Early Childhood (0-5) Acceptable pre-reading and math skills AND behavior generally socially appropriate

Percent of parents with concerns about a child’s emotions, concentration, behavior, or ability to get along with others (ages 0-8) Percent of families relying on low-cost food (ages 0-8) Children ages 1-5 whose family members read to them less than 3 days per week (school readiness)

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Middle Childhood (5-12) Basic reading and math skills AND social-emotional skills

Standardized test math scores Standardized test reading scores Percent of parents with concerns about child’s emotions, concentration, behavior, or ability to get along with others (9-14)

Adolescence (12-19) Graduates from high school with a GPA > 2.5 AND has not been convicted of a crime nor become a parent

High school graduation status (on time or not) Juvenile property and crime data (violent arrest rate and property arrest rate Became a teen parent? Percent of 6th-8th and 9th-12th grade students who report ever feeling sad or hopeless; percent of 6th-8th and 9th-12th grade students who have considered suicide; percent of young adults ages 18-25 who are currently depressed

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Transition to Adulthood (19-29) Lives independently AND receives a college degree or has a family income of > 250% of the federal poverty level

Employed status of population (by race, sex, and age 16-19) Percent FPL/Family income Attending post-secondary training or education Average number of days poor physical or mental health prevented usual activities, such as self-care, work, or recreation

Adulthood (29-40) Reaches middle class (300% FPL)

Average number of days poor physical or mental health prevented usual activities, such as self-care, work, or recreation Percent FPL/Family income at age 29 Employment status of the population (by education level age 25+)

38

So What?

• Clarity of overall goal: what is success? • Clear success measures, long and short term • Quality data • Evidence-based policy & programs • Integration and co-ordination • Bipartisan, cross-agency support. • Patience!

39

[email protected]

www.brookings.edu/blogs/social-mobility-memos

@richardvreeves

mailto:[email protected]

http://www.brookings.edu/blogs/social-mobility-memos





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