Land of Opportunity?

If you are of a certain age, as I am, you grew up being told and probably believing that America is the land of opportunity. For many of us, it certainly has been. The combination of working hard and steadily, saving, and playing by the rules has paid off for many. Yet, as a person who deals almost daily with demographics, I have often had a gnawing feeling when I looked at income, education and lifestyle distributions. Is this still or was it ever really the land of opportunity?

My last post was about Big Data and I recommended that readers get a copy of Seth Stephens-Davidowitz’s EVERYBODY LIES and devour it. A study that he mentioned in that book will be the topic of this post.

Most of us have looked at hundreds or, in my case, thousands of research studies both long and short, superficial and occasionally profound. One question I always need answered is how large is your sample, how was it drawn, and what geography did it cover? People often brag about the number of observations that they have—500, 800, 1000! Well, Seth found us the veritable mother load of observations. A study from Raj Chetty at Harvard tracked the tax records of all Americans over a period of several years(using actual IRS data). This treasure trove of data gave them a staggering 1.2 billion observations. Now, the knee jerk reaction of many who hear of that kind of any unwieldy base is to say that a traditional survey would have given them remarkably similar answers. They are probably correct. Yet, what Professor Chetty did with the data was different—with so many observations, he was able to drill down and deep GEOGRAPHICALLY. What he found was enlightening, disturbing, yet made a great deal of sense.

Previous global studies found that if one were born in the bottom 20% of a society economically their chance of reaching the top 20% was as follows:


United States     7.5%

United Kingdom     9.0

Denmark          11.7

Canada.                    13.5


The U.S. does not do well in terms of upward mobility, it would appear.

Chetty, with his massive collection of cold income facts, was able to break out the U.S. by MARKET.

Here is what popped and is quoted in EVERYBODY LIES:


San Jose, CA                               12.9

Washington, DC                          10.5

Unites States Average                   7.5

Chicago, IL                                   6.5

Charlotte, NC.                              4.4


Amazingly, he also tracked people who moved from a metropolitan area that was a low performer to one that had greater prospects for upward mobility. The results? Over time, people who moved or their children had a higher probability of climbing the rungs of the financial success ladder. Other issues emerged that backed this up. College towns did better despite lack of high wealth as it appears the local professor population demanded and fought for better schools. Low income students did well perhaps due to peer pressure from children of academically advanced parents. So, concluded Stephens-Davidowitz, “some parts of America are better at giving a chance to escape poverty than others.”

Also, a few other trends emerged. The top 1% of women in income live 10 years longer than the bottom 1% of women. With men, the gap is a staggering 15 years! Poor people in a city with a lot of rich people live longer than those not surrounded by the wealthy. Professor David Cutler says it could be due to “contagious behavior.” The wealthy work out, eat better, tend not to smoke, and like less pollution. Poor people in wealthier cities tend to mimic that behavior.

Absorbing all this makes me pause a bit. I am not saying that pre-destination reigns in America. Young men and women can “pull themselves up by their bootstraps” and overcome adversity in many cases. But, it has always been hard and given certain structural issues in our society today, it may be getting even harder.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com