Why the Size of Your City's Middle Class Matters Even if You're Not In It
Earlier this summer, economists at Harvard and the University of California at Berkeley released a widely discussed study showing that a child's chances of escaping poverty depends heavily on the luck (or misfortune) of where he or she lives. Some U.S. cities seem to create, or enable, more opportunity than others for economic mobility. A poor child raised in Atlanta faces much longer odds of growing up to be middle-class than a poor child raised in Salt Lake City.
So what's the difference between Salt Lake City and Atlanta? The authors of the original study highlighted a few strong correlations: Metropolitan areas with more two-parent households, higher quality schools, and lower racial and economic segregation were associated with higher economic mobility. But researchers at the Center for American Progress have taken up the same dataset used in that study and now added another wrinkle: Among the 100 largest metro regions in the country, places with higher economic mobility also tend to have a larger middle class.
In a chart, this is what that relationship looks like:
As authors Ben Olinksy and Sasha Post note, the size of a region's middle class is strongly linked to the likelihood that a poor child may grow up to join it:
Specifically, the data suggest that for every percentage-point increase in the share of a region’s population who fall between the 25th percentile and the 75th percentile of the national household income distribution, children who begin at the 25th percentile of the income distribution will climb up nearly half a percentile. So if one city’s middle class is 10 percentage points larger than another’s, we would expect that its low-income children will grow up to earn incomes that put them 5 percentiles higher in the national distribution.
For example, imagine a city in which 40 percent of the population is in the middle class. According to the data, a child who begins in the 25th income percentile could expect to reach the 37th percentile when he or she turns 30. But if the city’s middle class were larger, say, 50 percent instead of 40 percent, then a low-income child could expect to end up in the 42nd percentile, making around $26,000 a year instead of $22,000 a year. That’s almost $4,000 in additional income—a 17 percent increase.
It's important to note that the causal relationship here is unclear, as Jim Tankersley does a good job of explaining at the Washington Post. Does the middle class get bigger because economic mobility allows previously poor people to join those ranks? Or do poor people have higher economic mobility because a broad middle class drives opportunity for everyone? A large middle class, for instance, might support a stronger school system, which in turn benefits the lower-income students who attend it.
This study can't answer this key causal question. But it does suggest that if you're poor and raising a child, you might be better off in the cities at the upper right-hand corner of that distribution shown above.
There are also some interesting caveats in the analysis:
Finally, one troubling finding is that few regions of the country with large African American populations have high mobility. In light of this observation and the fact that African Americans have much less economic mobility than other groups, we checked to see whether race might limit the relationship between the middle class and mobility. The results are concerning: In regions with large African American populations, increases in the middle class’s size are linked to smaller increases in mobility than in other regions. This suggests that the middle class’s influence on mobility may be dampened by racial inequities, both social and economic. The size of the middle class is a powerful predictor of mobility, yet its reach is limited by our nation’s troubling legacy of racial inequity.
This last finding suggests a spatial component to economic mobility (a theme the original Harvard and Berkeley study yielded is as well). If your metropolitan area has a large middle class, but many poor people are racially segregated far away from it – from middle-class schools, middle-class job opportunities, middle-class neighborhoods – how will they reap any benefits associated with it?