The principle of equal opportunity holds so distinguished a place in U.S. history that it even appears in drafts of the country’s founding documents.1 This idea has been interpreted in various ways, but it is typically understood to mean that success should depend on hard work, that opportunities to get ahead should not be affected by the circumstances of birth, and that the labor market should allow for free and open competition among children from all social origins.
But is the United States realizing this frequently expressed commitment to equal opportunity? According to a recent survey, only 64 percent of Americans now believe that opportunities for mobility are widely available, the lowest percentage in the roughly three decades the question has been tracked.2 Concern is also growing among scholars and policymakers that the ideal of equal opportunity, which has always been difficult to realize, is not being pursued as effectively as circumstances demand. This sense has been partly fueled by research, much of it by The Pew Charitable Trusts, showing that those born into the top or bottom of the economic ladder are quite likely to remain there as adults.3
Given the substantial body of research on economic mobility, one might imagine that little remains unknown. This is not the case. Although it is well established that a person’s income is related to that of his or her parents, some uncertainty remains about exactly how strong this relationship is. Among studies that rely on the intergenerational elasticity (IGE), the estimates of mobility range widely, making it difficult to reach a consensus on how evenly or unevenly opportunity is distributed. (For an explanation of the IGE, see the sidebar on Page 2.)
In previous research, the IGE estimates have varied widely, with recent estimates based on administrative data ranging from as low as 0.34 to as high as 0.6.4 Because of this variability, the actual level of economic persistence across generations remains unclear.5