The Odds of Income Mobility in Dallas

NY-Times-toolA child raised in Dallas whose family is in the bottom fifth in terms of income has a 6.4% chance of winding up in the top fifth of income as an adult, according to a new study that the New York Times reports on today with great interactive tools. That number is on the lower end of income mobility, not as bad off as places like Atlanta and much of the Southeast U.S., but not as strong as in much of the Northeast, the Great Plains, or the Pacific Coast. And, right next door, the Fort Worth area has a stronger 8.8% rate.

The study by a “team of top academic economists” used anonymous earning records. There were notable disparities for lower- and middle-class families, depending on location:

The gaps can be stark. On average, fairly poor children in Seattle — those who grew up in the 25th percentile of the national income distribution — do as well financially when they grow up as middle-class children — those who grew up at the 50th percentile — from Atlanta.

Geography mattered much less for well-off children than for middle-class and poor children, according to the results. In an economic echo of Tolstoy’s line about happy families being alike, the chances that affluent children grow up to be affluent are broadly similar across metropolitan areas.

What’s responsible for the differences?

The researchers concluded that larger tax credits for the poor and higher taxes on the affluent seemed to improve income mobility only slightly. The economists also found only modest or no correlation between mobility and the number of local colleges and their tuition rates or between mobility and the amount of extreme wealth in a region.

But the researchers identified four broad factors that appeared to affect income mobility, including the size and dispersion of the local middle class. All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods.

To improve this situation Dallas needs to move towards the day when we can’t glance at maps like this one and see such a stark contrast between north and south.