Giving Compass' Take:

• A working paper by the UC Berkeley economist Jesse Rothstein builds on the research that education alone won't necessarily help a child reach the same income level as their parents. There are other external factors that can affect an individual's trajectory. 

• What factors do you think are the most important or will affect children the most to change their economic future?

• Some organizations are providing services for positive youth development to restore levels of higher social mobility for those who grow up with fewer opportunities. 

One of the most commonly taught stories American schoolchildren learn is...that no matter who you are, what your parents do, or where you grow up, with enough education and hard work, you too can rise the economic ladder.

One study was published in 2014, by a team of economists led by Stanford’s Raj Chetty. After analyzing federal income tax records for millions of Americans, and studying, for the first time, the direct relationship between a child’s earnings and that of their parents, they determined that the chances of a child growing up at the bottom of the national income distribution to ever one day reach the top actually varies greatly by geography.

A new working paper authored by the UC Berkeley economist Jesse Rothstein builds on that research, in part by zeroing in on one of those five factors: schools. The idea that school quality would be an important element for intergenerational mobility—essentially a child’s likelihood that they will one day outearn their parents—seems intuitive: Leaders regularly stress that the best way to rise up the income ladder is to go to school, where one can learn the skills they need to succeed in a competitive, global economy.

Rothstein’s new work complicates this narrative. Using data from several national surveys, Rothstein sought to scrutinize Chetty’s team’s work—looking to further test their hypothesis that the quality of a child’s education has a significant impact on her ability to advance out of the social class into which she was born.

Rothstein, however, found little evidence to support that premise. Instead, he found that differences in local labor markets—for example, how similar industries can vary across different communities—and marriage patterns, such as higher concentrations of single-parent households, seemed to make much more of a difference than school quality.

Read the full article about education and economic mobility by Rachel Cohen at The Atlantic