Over at getrichslowly.org there is an interesting post discussing the Economic Mobility Project. The idea behind the Economic Mobility Project is to research and analyze the social, economic, and human capital factors that impact one’s ability to move up the economic ladder over a generation.
Before reading the post I had never heard of the Economic Mobility Project. The topic is an interesting one, and if I had more time I would read some of the group’s work.
Do the Silver Spoons Stay Full?
Getrichslowly provides a summary of some key points from an Economic Mobility Project press release. One piece of data really jumped out to me. Getrichslowly says, “If you are born into wealth, you have a 23% chance of remaining wealthy.” A little later, he quotes from the press release: “About one-third of those born into wealth remain wealthy.”
There is a discrepancy between the numbers, but either way I found it very surprising that only 23% or 33% of those born wealthy would remain wealthy. I would have expected a much higher number, maybe 80%.
College is Important for Those Born Into Wealth
I went to the press release to see what I could find. It turns out that the press release actually states: “23 percent of those born into the top quintile that do not get a degree stay at the top as adults” (my emphasis). That clears up the discrepancy noted above. [UPDATE: Getrichslowly has updated his post to clear up the discrepancy.] Meanwhile, “of Americans born into the top quintile who earn a college degree, 54 percent remain there as adults.” 54% compared to 23% is quite a difference. You better go to college even if you’re born into wealth.
Later the press release states: “36 percent of children born to parents in the top wealth quintile remain at the top as adults.” The 36% number makes sense given the 23% and 54% figures. If I’ve done the numbers right, it means that slightly more than half of those born into the top quintile do not get a college degree. I find that slightly surprising, but not overly so.
Lower Than I Thought
While getrichslowly’s description of the 23% number was a little misleading, the fact remains that only 36%, or slightly more than one-third, of those born into the top quintile remain there as adults. Wow. Like I said, I would have expected a much higher number.
Reprise: College is Important for Those Born Into Wealth
Let me mention one more thing about the 23% number. Remember, the 23% number refers to “those born into the top quintile that do not get a degree stay at the top as adults.” If you took all those born into the top quintile and randomly sprinkled them across the five quintiles of the wealth spectrum, you would expect 20% in each quintile. The implication is that those born into wealth that do not get a college degree have only slightly better than a random chance of remaining in the top quintile. Interesting.
I appreciate getrichslowly’s conclusion: “The mission of Get Rich Slowly is very much about economic mobility. I was born into a poor family, as was my father, as was his father before him. I’m pursuing the American Dream. I’m hoping to help others achieve it as well” (his emphasis). Hear hear.