NEW YORK (MainStreet) — In the United States, we are taught that if we pursue an education and work hard enough, we will prosper. But enough real research has been conducted to reveal this is over-simplistic and ignores the role privilege plays in perpetuating both poverty and affluence.
A new study out of the Brookings Institute by that was presented at the Federal Reserve Bank's annual conference in Boston last month sheds even more light on just how stacked the deck can be against those in the bottom income bracket.
The research--which was conducted by Brookings Institute economies and co-directors of the Center on Children and Families Richard Reeves and Isabel Sawhill-- reveals that even those born into poverty who do everything right might still have difficulty climbing up the economic ladder. For instance, kids who get good grades and attain a college degree will still struggle much more to advance forward as compared to their more affluent peers. Furthermore, those born into upper income brackets will "stick" there, often inheriting not just money, but professional opportunities, from their families. In fact, a high school dropout from an affluent family will probably still fare better than a poor kid from a bad neighborhood who makes it to college and gets his bachelor's degree.
More specifically, rich high school dropouts remain at the top at around the same level that poor college grads stay stuck in the bottom--at a rate of 14% versus 16%.
These figures deal a blow to the idea of America as a meritocracy where scholastic achievement is automatically rewarded with better financial security.
"The less talented children of the affluent are able to defy social gravity and remain at the top of the ladder, reducing the number of places open to those from less fortunate backgrounds," wrote Reeves in the New York Timeslast year.
But how can something such as one's class be so stagnant in a society that boasts of ample opportunities for upward mobility?
Race is part of the equation.
According to the study, half of black children born in the bottom quintile of the income spectrum remain there in adulthood, compared to a quarter of whites. In fact, only 3% at the bottom of the income bracket will make it to the top. Not only that, middle-class black children are more likely than white children to fall downward in income bracket than to rise. Namely, only 14% of black children born to parents of middle income will advance upward economically, while 69% will slide down. By contrast, 44% of middle-class white children will advance upward, and only 34% will go downward.
However, this does not mean bottom income children shouldn't bother with college. The study still found that those who come from low-income households and attain a college degree are 20 times more likely than their low-income peers who drop out of high school to advance up the class ladder. Meanwhile bottom-rung children who do not finish high school have a 54% probability of remaining there as adults.
"Education has a very significant effect on someone's mobility, but it just isn't the only factor," says Reeves. "It just shows the limits of education as an equalizing mechanism. That being said, if you significantly increase the amount of people who get a college education remain, you would also increase the number of people who have upward mobility."
Reeves also notes that the advantages of a college education are highest for those from low income backgrounds, particularly in helping them rise out of poverty.
Yet family dynamics also contribute to upward mobility. Specifically, children of mothers who remain unmarried throughout their rearing only have a 5% chance of making it to the top of the income distribution, compared to 10% overall. By contrast, only 17% of children of mothers who were and remained married while they were growing up stay stuck in the bottom, while 32% remain stuck whose mothers separated or divorced at some point during their childhoods.
Reeves and Cahill's findings are not necessarily breaking new ground.
A study conducted by economists Greg Duncan and Richard Murnane found that high-income parents have increased their spending on enrichment activities for their children 151% (as adjusted for inflation) since 1972, while low-income parents have just 57%. Not only can more affluent parents afford to spend more money on their kids, they can also spend more time with them as opposed to single working-class mothers who are sometimes working more than one job to make ends meet.
More money also translates into more opportunities for rich kids that will allow them to advance up (or stay atop) the income ladder more easily. This doesn't only include nepotism or better connected family members.
Wealthier families can afford to provide their children with more resources to help them stay ahead in life--from reputable colleges (where they can often focus on their courses without the distraction of working multiple jobs) to unpaid internships. Having parents who can afford to pay for most or all of a student's college tuition also means that he will not be forced to take on student loan debt--a burden that can follow a person well into retirement age and undermine his or her ability to reach important financial milestones in adulthood such as buying a home.
"It's not quite a heads-I-win, tails-you-lose game where rich kids get better educations, yet still get ahead even if they don't-but it's close enough," wrote Matt O'Brien for the Washington Post. "[I]f it keeps up, the American Dream will be just that."
--Written by Laura Kiesel for MainStreet