Moving on up? Not so much in U.S.

According to numerous studies, the United States has the highest level of income inequality among all rich nations. For example, low-income households, or those at the 10th percentile of the income distribution, spend approximately $8,900 per year per child, while high-income families, or those at the 90th percentile, spend $50,000 per child.

“People like to think of America as the land of opportunities,” says Dr. Kathryn Wilson, associate professor of economics at Kent State University. “The irony is that our country actually has less social mobility and more inequality than most developed countries.”

In a recent study funded by the Russell Sage Foundation, Wilson and colleagues Dr. Timothy Smeeding at Syracuse University and Dr. Robert Haveman at University of Wisconsin-Madison, examined social mobility, or the ability to move up or down the economic ladder, in the United States. Specifically, they investigated the relationship between parental socioeconomic status and offspring socioeconomic status by studying three variables: family income, education and occupation class.

Their research found that parental income seems to have a large effect on offspring income. A primary reason for less mobility for those from lower income families is less educational attainment; however Wilson suggests that lack of money to pay for education is not the primary reason for less educational attainment but rather factors such as parental expectations or knowledge of the higher education system result in less education for those from lower income backgrounds. In addition, parental education and occupational class were found to be stronger predictors of offspring educational attainment than parental income.

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