If You’re Born Poor in Chicago—Or Rich—You’re Probably Going To Stay That Way

A new study on income mobility shows that, in Chicago, the rich stay rich and the poor stay poor. But things can change. You always have a chance to get poorer.

chutes and ladders

Photo: Ben Hussmann/CC by 2.0

This city has chutes and ladders, but most people don’t really go up or down either one.

Today the New York Times has a fascinating piece on a massive new study about intergenerational economic mobility in America, one that “that other researchers are calling the most detailed portrait yet of income mobility in the United States,” according to David Leonhardt.

And it’s sufficiently detailed to compare metropolitan regions, the focus of the study: the odds, depending on where you live, that children of low-income parents will rise to the highest quintile of income, vice versa, and anywhere in between.

Chicago does not come off well. Of the top 30 metro regions in the country, the odds that a child born into the bottom fifth quintile (parents’ income of less than $25k) will move to the top fifth quintile are six percent, 25th out of 30. Only St. Louis, Cincinnati, Cleveland, Detroit, and Atlanta rank below Chicago.

The odds that a child raised in the top fifth will remain there, in Chicago, are 35 percent—good for 13th out of those same 30 metros. In other words, it’s much easier to maintain wealth than it is to build it from scratch, and in Chicago it’s especially hard. Of 10 largest metros in America, Chicago is the second-hardest for the bottom fifth to rise to the top fifth.

But that only covers the extremes: the odds of the very poor rising to the ranks of the very well off, and the odds of the very well off staying that way. The patterns there are apparent but not very surprising. So I was curious what happens to the rest of Chicagoans, and what happens if your sights aren’t set quite that high: moving from very poor to middle class, for instance, or middle-class to wealthy.

And a very interesting pattern emerges. If you’re raised poor or lower-middle-class in Chicago (first and second quintiles), you’re more likely to slide down the ladder than rise up it. If you’re upper-middle-class or rich (fourth and fifth quintiles), you’re more likely to climb it further than slide down. And if you’re exactly middle class, the third quintile, it’s a bell curve.

* The most likely scenario across all income levels is basically a tie between the rich staying rich (35 percent) and the poor staying poor (34 percent). 

* The least likely scenario is a poor child becoming a rich adult (six percent). The second-least likely scenario is a poor child becoming an upper-middle-class adult (11 percent).

* That’s followed by a lower-middle-class child becoming a rich adult (12 percent) or a rich child becoming a poor or lower-middle-class adult (13 percent).

* The middle class are more likely to become poor than rich (19 percent versus 18 percent) but more likely than either to become lower-middle class, stay middle class, or move to the upper-middle class (21, 21, and 20 percent).

Details: For the purposes of the study, parents’ income is the mean family income from 1996-2000. Child earnings are the mean family income for the 1980-85 birth cohort, taken in 2010-2011: in other words, 30-year-olds. “Rich,” it should be noted, is relative: the 80th percentile begins at $107,500 for parents, $99,600 for children. All the data’s here.



1 year ago
Posted by WAK

It seems like you are mis-interpreting this data. While pointing out some interesting data points, losing sight of overall statistical trends.

Think of it this way - what is the chance that an individual will stay in their quintile, v. move up or down.

For those in the lowest quintile, a 34% chance that they would stay in lowest, but a corresponding 66% chance that they will rise - become richer (or at least relatively richer). Likewise, those in the 5th have a 35% chance they will stay there, and 65% chance that they will fall to a lower quintile.

Its almost a mirror image showing those that are born in the lowest are most likely to rise, and those born in the highest are most likely to fall to a lower income quintile.

So in reality, if you are rich (or at least born rich), you are most likely to become less rich, and if you are poor, you are most likely to become less poor, or stated otherwise, the overall trend is a tendancy to the middle.

The 2nd and 4th quintiles also are a close mirror image. For 2nd, 49% chance to rise, 25% chance to fall. For 4th, 52% chance to fall, 26% chance to rise.

Once again, the most common trend is movement toward the middle.

Likewise those in the middle are most likely to stay where they are - or rise/fall in equal percentage. For 3rd quintile 40% chance to fall, 38% chance to rise.

If anything, this graph might show a flattening of incomes. What it might hide is a trend documented elsewhere of massive increases in wealth among the most wealthy - but all that is hidden within the 5th quintile in this analysis. More light could be shed on that topic with an analysis of what percentage of income is earned by each quintile over time.

You could argue that you might want to see more in the lower quintiles moving up, but that of course would mean more in the middle quintiles moving down.

And also - is the profile of Chicago much different than other cities? Without some context, its hard to know what to make of this.

A recent analysis of the national data by NY Times (http://www.nytimes.com/2013/07/22/business/in-climbing-income-ladder-location-matters.html) seemed to indicate that Chicago was around the average when it comes to those in the lowest quintile moving up. But then again, while a high percentage of those in lowest quintile moving up sounds good, it also means that a higher percentage of those in higher quintiles must move down, so its a tricky analysis and not immediately clear (to me at least) what we would most want to see. When you deal with these quintiles, its a zero sum game.

1 year ago
Posted by GoDeep

"If you're raised poor or lower-middle-class in Chicago (first and second quintiles), you're more likely to slide down the ladder than rise up it. If you're upper-middle-class or rich (fourth and fifth quintiles), you're more likely to climb it further than slide down. And if you're exactly middle class, the third quintile, it's a bell curve."

Yeah, I agree with the above poster. For statistical reasons you can't graph it the way its done here and so it can lead to wrong conclusions. If you're born in the 19th percentile (ie, 1st quintile) on average you'll end up at the 38th percentile (from very poor to working class). If you're born at the 39th percentile (ie, 2nd quintile) then on average you'll end up at the 45th percentile (from working class to average). That's whats most likely to happen.

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