The ability of individuals to achieve the American dream depends on where they live, according to the first state-by-state look at the opportunity to move up the economic ladder.
People who live in Maryland, New Jersey, New York, Connecticut, Massachusetts, Pennsylvania, Michigan and Utah are more likely to improve their economic standing after their prime working years than the typical American, a study by the Pew Charitable Trusts finds.
In Louisiana, Oklahoma, South Carolina, Alabama, Florida, Kentucky, Mississippi, North Carolina and Texas, people are less likely to improve their economic standing, and in some cases, are falling behind.
Economic mobility “is a measure of opportunity and a measure of the health of the American dream,” says Erin Currier of Pew’s Economic Mobility Project.
Educational attainment, the ability to save or gain assets and neighborhood poverty impact economic mobility, Currier says.
The study used Census and Social Security Administration earnings data for individuals born from 1943 to 1958. It focused on prime working years, the 10 years from ages 35-39 and 45-49.
Timothy Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin-Madison, says people are more likely to do better for themselves — and their children are likely to do better — in states with more educated residents and more dynamic economies, such as those in the Northeast.
“This study shows place matter,” Smeeding says. “It shows the American dream is harder to reach in some places.”
Scott Winship, a fellow of economic studies with Brookings Institution, says economic mobility is particularly important for the poor. He says 40% of the people who are born in the bottom rung of the economic ladder stay there.
In North Carolina, where the poverty rate is 16% and unemployment hovers at 9.7%, it’s not surprising that fewer residents move up economically, says Gene Nichol, director of the Center on Poverty, Work and Opportunity at the University of North Carolina-Chapel Hill.
“The South is the native home of American poverty,” he says.
Timothy Bartik, senior economist at the W.E. Upjohn Institute for Employment Research in Michigan, says higher moblity in that state is likely due to higher wages in manufacturing and public sector jobs compared to other states. However, he says the state has been hurt by cuts in the number of manufacturing and public sector jobs.
“Unless Michigan can either reverse these trends or boost educational attainment in the future, any current high ranking it might have in economic mobility will tend to decline over time,” he says.