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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
7
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
8
My Version of the American Dream, In Lego…
9
The Opportunity Ecosystem: Four Interacting Factors
• Family – stability, parenting • Education – achievements and skills • Race – especially poor black mobility • Geography – metros and neighborhoods
10
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
Income Quintile at Birth
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
Income Quintile at Birth
Top Q at 40
Middle Q at 40
Bottom Q at 40
Continuously-Married Mothers
11
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
Income Quintile at Birth
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
12
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%
Bottom Quartile Second Third Fourth Top Quartile
Income Quintile at Birth
Top Quartile atage 40
Fourth
Third
Second
Bottom Quartileat age 40
Education: High School Graduate
Source: Author’s calculations.
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%
Bottom Quartile Second Third Fourth Top Quartile
Income Quintile at Birth
Top Quartile atage 40
Fourth
Third
Second
BottomQuartile at age40
Education: College Graduates
Source: Author’s calculations.
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
1979-1982 birth cohorts
1961-1964 OLS projection
1979-1982 OLS projection
15
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
1961-1964 birth cohorts
1979-1982 birth cohorts
1961-1964 OLS projection
1979-1982 OLS projection
16
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
Income Quintile at Birth
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
Income Quintile at Birth
Top Q at 40
Middle Q at 40
Bottom Q at 40
17
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).
18
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
19
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)
23
Relative College Graduation Rate (Income Adjusted)
24
Black Population (% CZ)
25
Single Mothers (% Children)
26
Religiosity (%)
27
So What? The O’Keefe Approach
• Select • Simplify • Amplify
28
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
31
32
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)
35
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)
36
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)
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
37
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)
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
rreeves@brookings.edu
www.brookings.edu/blogs/social-mobility-memos
@richardvreeves
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