File Under “Duh” – Good Parents Matter Edition

I’ve got lots of half done and half baked blog posts. I’ll have to get back to posting.

For now an easy one with a couple comments. The Atlantic relays shocking (*) news from economists that your parents matter to your success. It’s a short article. Go ahead and read it.

But I’d like to add a couple thoughts that might not be so obvious.

First, social mobility is a relative measure and it is tied to income distribution (income inequality). This applies both to both the income distribution at a given time and to the changes in income distribution over time. For example, let’s say your born into the bottom quintile but grow up to earn 3x the bottom quartile income. If you’re in a society with fairly flat income distribution that may put you in the top quintile. If you’re in a steep “power curve” distribution society that may only get you up to the middle. Same absolute income increase, different relative change. Also, if you’re growing up during a period of increasing income inequality then trying to climb from the bottom is like walking up the down escalator – the bands are stretching even as you progress.

So it’s worth keeping in mind that this mobility is about relative income, not absolute income. There could be zero mobility in a rapidly growing economy with no change in income distribution and absolute incomes would rise rapidly for everyone – the rising tide lifting all boats thing – but relative position would be static.

Second, the geographic part of the article was uninformative. Why is mobility higher in San Francisco than the Deep South? It must be progressive policies, right!!! Well, um… think about the nature of our income inequality and how opportunity works. Income inequality exists within geographic regions and between them. U.S. wealth and income are highly concentrated. Where are they concentrated? Well, in places like San Francisco and San Jose. If you grow up poor in the Deep South you are surrounded by poor people and very few upper middle class and wealthy. If you grow up poor in San Francisco you are surrounded by upper middle class and rich people. Regardless of attitudes and policies, you’re simply going to have much better exposure to opportunity when your in close proximity to wealth and power.

OK, policy and attitudes do matter. If you live in a truly repressive feudal society your close proximity to wealth and power won’t do you much good. Parts of the Deep South surely resemble such a situation. However, in the U.S., even as the influence of dynastic wealth and aristocratic power has risen, capital is put to work aggressively and proximity to wealth and power is obviously related to proximity to dynamic businesses.

* “Shocking” seems to be really trending from those hack ads to real headlines and real people’s communications. Shocking!

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