Lane Kenworthy, The Good Society
April 2019

Americans believe in equal opportunity. Surveys consistently find 90% of the public agreeing that “our society should do what is necessary to make sure that everyone has an equal opportunity to succeed,” as figure 1 shows. This level of support is rare.¹ It suggests policy makers ought to put equality of opportunity at or near the top of the list of goals they pursue.

Yet true equality of opportunity is unattainable. Equal opportunity requires that each person has equivalent skills, abilities, knowledge, and noncognitive traits upon reaching adulthood, and that’s impossible to achieve. Our capabilities are shaped by genetics, developments in utero, parents, siblings, peers, teachers, preachers, sports coaches, tutors, neighborhoods, and a slew of chance events and occurrences. Society can’t fully equalize, offset, or compensate for these influences.

In fact, if we think about it carefully, few of us truly want equal opportunity, as it would require massive intervention in home life and probably also genetic engineering. Moreover, if parents knew everyone would end up with the same skills and abilities at the end of childhood, they would have little incentive to invest effort and money in their children’s development, and that would result in a lower absolute level of capabilities for everyone.

What we really want is for each person to have the most opportunity possible. We should aim, in Amartya Sen’s helpful formulation, to maximize people’s capability to choose, act, and accomplish.² Pursuing that goal requires providing greater-than-average help to those with less advantageous circumstances or conditions. That, in turn, would move us closer to equal opportunity, even if full equality of opportunity isn’t attainable.

Americans have tended to believe that ours is a country in which opportunity is plentiful. This view became especially prominent in the second half of the nineteenth century, when the economy was shifting from farming to industry and Horatio Alger was churning out rags-to-riches tales.³ It’s still present. On the night of his election in 2008, Barack Obama, the country’s first African American president, began his victory speech by saying “If there is anyone out there who still doubts that America is a place where all things are possible … tonight is your answer.”

There’s more than a grain of truth in this sentiment. One of the country’s major successes in the past half century has been its progress in reducing obstacles to opportunity stemming from gender and race. Today, women are more likely to graduate from college than men and are catching up in employment and earnings.⁴ The gap between whites and nonwhites has narrowed as well, albeit less dramatically.⁵

When we turn to family background, however, the news is disappointing. Americans growing up in less advantaged homes have far less opportunity than their counterparts from better-off families, and this opportunity gap hasn’t narrowed in recent decades. If anything, it may have widened.

Skip to:

• Family background and unequal opportunity
• Causes of unequal opportunity
• Has the opportunity gap widened?
• How does the US compare to other rich democratic countries?
• How can we close the opportunity gap?

FAMILY BACKGROUND AND UNEQUAL OPPORTUNITY

There is no straightforward way to measure opportunity, so social scientists tend to infer from outcomes, such as employment or earnings. If we find that a particular group fares worse than others, we suspect a barrier to opportunity. It isn’t ironclad proof, but it’s the best we can do. To assess equality of opportunity among people from different family backgrounds, we look at relative intergenerational mobility — a person’s position on the income ladder relative to her or his parents’ position.⁶

Think of the income distribution as a ladder with five rungs, with each rung representing a fifth of the population. In a society with equal opportunity, every person would have a 20% chance of landing on each of the five rungs and hence a 60% chance of landing on the middle rung or a higher one. The reality is quite different. An American born into a family in the bottom fifth of incomes between the mid-1960s and the mid-1980s has roughly a 30% chance of reaching the middle fifth or higher in adulthood, whereas an American born into the middle fifth has a 66% chance of ending up in the middle fifth or higher and one born into the top fifth has an 80% chance.⁷

Figure 2 offers a more precise way to see the degree of inequality of opportunity. It uses data from a large sample of Americans born in the years 1978-83 and their parents. On the horizontal axis is the parents’ income rank — their income relative to the incomes of other parents — when the children were in their late teens. On the vertical axis is the average income ranking of the children of those parents when the children are in their 30s. The dot farthest to the left, for instance, shows the average income rank of children whose parents were in the lowest income percentile.

In a society with perfectly equal opportunity, the data points in this chart would form a flat line — children’s income position in adulthood would, on average, be the same no matter what their parents’ income was. Instead we see a line that slopes sharply upward. Among people whose parents were on the bottom rungs of the income ladder, the average income ranking in young adulthood is relatively low. Among those whose parents were in the middle, the average is in the middle. And persons whose parents’ income was at the high end tend to end up at the high end themselves.

There is some movement. Among children whose parents were in the lowest income percentile, the average ranking is the 33rd percentile. That means some end up at the bottom, some end up in the middle, and perhaps a few end up even higher. Similarly, among children whose parents were at the top of the income distribution, the average income ranking is around the 68th percentile, which means many of them don’t stay at the very top. Even so, the correlation between parents’ income and children’s income is quite strong.

CAUSES OF UNEQUAL OPPORTUNITY

The causes of inequality of opportunity are multiple and interlinked, from genes to family structure to parenting to household income to neighborhood to schooling and more.

Children in low-income homes tend to start behind right from birth, due to differences in genetics and what happens in utero.⁸ Mothers’ consumption of alcohol, smoking, poor diet, exposure to lead, and stress can adversely affect babies’ development during the nine months of pregnancy.

Poorer children are less likely to grow up in a home with both of their original parents, and such kids tend to fare worse on a host of outcomes, from school completion to staying out of prison to earning more in adulthood.⁹

Low-income parents aren’t able to spend as much on goods and services aimed at enriching their children, such as music lessons and other extracurricular activities, travel, and summer camp.¹⁰

Parents with less education and income tend to read less to their children and provide less help with schoolwork. They are less likely to set and enforce clear rules and routines. And they are less likely to encourage their children to aspire to high achievement in school and at work. Low-income parents also are more likely to be anxious and stressed, which may affect the general home atmosphere and hinder their ability to provide emotional support to their children.¹¹

Children in low-income families are more likely to grow up in neighborhoods with high crime, with few employed adults, and with weak institutions and organizations (civic groups, churches, sports leagues).¹²

In the prekindergarten years, children of affluent parents often attend high-quality education-oriented preschools, while kids of poorer parents are more likely to be left with a neighborhood babysitter who plops them in front of the television.¹³

Elementary and secondary schools help to equalize opportunity, and as disparities in funding across public K-12 school districts have diminished, they’ve become more effective at doing so. Yet large differences in the quality of schools persist, and the poorest neighborhoods still tend to have weaker ones.¹⁴

The equalizing effects of college are striking. Among Americans whose family incomes during childhood were in the bottom fifth but who get a four-year college degree, 53% end up in the middle fifth or higher, which is pretty close to the 60% chance they would have with perfectly equal opportunity.¹⁵ But children from poor backgrounds are less likely than others to enter and complete college, partly because they lag behind at the end of high school, partly because college is so expensive, and partly because many colleges don’t have adequate supports in place.¹⁶

When it comes time to get a job, the story is no better. Low-income parents tend to have fewer valuable connections to help their children find good jobs.¹⁷ Some people from poor homes are further hampered by a lack of English language skills. Another disadvantage for the lower-income population is that in the 1970s and 1980s, the United States began incarcerating more young men, including many for minor offenses. Having a criminal record makes it more difficult to get a stable job with decent pay.¹⁸ A number of developments, including technological advances, globalization, a loss of manufacturing employment, and the decline of unions, have reduced the number of jobs that require limited skills but pay a middle-class wage — the kind of jobs that once lifted poorer Americans into the middle class.¹⁹

Finally, not only do those from better-off families tend to end up with more schooling and higher-paying jobs. They also marry (or cohabit with) others like themselves, which magnifies the impact of gaps in skills, jobs, and pay among individuals.²⁰

HAS THE OPPORTUNITY GAP WIDENED?

From the mid-1800s to the 1970s, differences in opportunity based on family circumstances decreased.²¹ As the farming-based US labor force shifted to manufacturing, many Americans joined the paid economy, allowing an increasing number to move onto and up the income ladder. Elementary education became universal, and secondary education expanded. Then, in the 1960s and 1970s, school desegregation, the outlawing of discrimination in college admissions and hiring, and the introduction of affirmative action opened economic doors for many Americans.

What has happened since the 1970s? It’s too soon to tell, as most Americans born after the 1970s are still quite young, making it difficult to know where on the income ladder they will end up. But there is reason to suspect that America’s progress in reducing inequality of opportunity based on family background has stalled, and perhaps even reversed. A few trends favor enhanced mobility: racial discrimination has continued to decrease, health insurance coverage for the poor has expanded due to changes in Medicaid in the 1980s and the late 1990s, we removed lead from gasoline beginning in the 1970s, violent crime has decreased sharply since the early 1990s, and in many states the gap in school funding between low-income districts and high-income districts has been reduced. However, a number of the key determinants of attainment — family structure, parents’ income, parenting styles and behaviors, education (some measures), employment and earnings, and partner selection — have moved in a direction that is likely to have widened the opportunity gap.²²

As figure 3 indicates, the collapse of the two-parent family has been most pronounced among parents with less than a college education. The same appears to be true of parental instability, which some experts believe is more consequential for children than the number of parents in the home.²³

Income inequality has increased since the 1970s.²⁴ As figure 4 shows, over the same period we’ve seen a rise in inequality of families’ expenditures on their children, particularly between the top and the rest.

With the advent of the modern intensive-parenting culture, class differences in parenting styles and traits seem to have increased.²⁵

As care of preschool-age children has shifted from stay-at-home mothers to out-of-home providers, it’s likely that the gap in the quality of care and education received by low-income kids versus high-income kids during these years has widened.

Households with different incomes increasingly live in different communities, as residential segregation by class has increased. Education and income gaps in participation in schools, civic organizations, churches, and other institutions have widened. And compared to their higher-income peers, children from low-income families have become less and less likely to participate in school-based extracurricular activities, from clubs to band to sports teams.²⁶

Despite the widening of disparities in family structure and stability, parents’ spending on their children, parenting styles and traits, the quality of out-of-home preschool, and neighborhoods, there hasn’t been a corresponding increase in inequality of test scores among American middle-school and high-school students.²⁷ Indeed, as figure 5 shows, the gap between between students whose parents are at the 90th percentile of the income distribution and students whose parents are at the 10th percentile was smaller among those growing up in the 1980s, 1990s, and 2000s than among those growing up in the 1950s and 1960s.²⁸

On the other hand, the gap in college completion has widened. Figure 6 shows college completion by parents’ income for children growing up in the 1960s and 1970s (birth years 1961-64) and children growing up in the 1980s and 1990s (birth years 1979-82). College completion increased among all groups, but the lower the parents’ income, the smaller the rise.

Finally, Americans increasingly tend to marry or partner with someone who has similar educational attainment.²⁹ This shift toward greater marital homogamy is likely to have further reduced the chance that someone starting at the bottom will end up in the middle or higher.

Though it’s too early to draw a confident conclusion about whether equality of opportunity has changed since the 1970s, several studies have attempted to do so. Three conclude that equality of opportunity, measured as relative intergenerational income mobility, has declined.³⁰

• Daniel Aaronson and Bhashkar Mazumder, using estimates from Census data
• Dierdre Bloome and Bruce Western, using National Longitudinal Surveys data
• Jonathan Davis and Bhashkar Mazumder, using National Longitudinal Surveys data

Five others, however, conclude that there has been no change.³¹

• David Harding, Christopher Jencks, Leonard Lopoo, and Susan Mayer, using data from the General Social Survey (GSS) and the Panel Study of Income Dynamics (PSID)
• Chul-In Lee and Gary Solon, using data from the PSID
• Scott Winship, using National Longitudinal Surveys data
• Raj Chetty, Nathaniel Hendren, Patrick Kline, Emmanuel Saez, and Nicholas Turner, using IRS tax records and Social Security Administration data
• Mike Hout, using General Social Survey data (on occupations)

HOW DOES THE US COMPARE TO OTHER RICH DEMOCRATIC COUNTRIES?

From 1865 to 1970, the United States probably had more relative intergenerational mobility than other affluent countries. But that may no longer be the case. Figure 7 shows the share of persons with parents in the bottom fifth of incomes who remain in the bottom fifth when they are adults. The US is among the nations with the least mobility.³²

Figure 8 shows the US intergenerational mobility pattern from figure 2 (above) along with comparable data for Canada. There is more mobility in Canada than in the US. Canadian children from families at the low end of the income distribution tend to end up a bit higher than their American counterparts, and those from families at the high end tend to end up a bit lower. A recent study suggests the difference between Denmark and the United States may be even larger.³³

Learning from other countries’ experiences is an important tool for improving policies and institutions. We need more and better data on intergenerational mobility.³⁴

HOW CAN WE CLOSE THE OPPORTUNITY GAP?

It’s unlikely that there is a silver bullet, so progress probably will have to come on multiple fronts. Promising strategies include good-quality, affordable early education, improved K-12 schools in low-income neighborhoods, enhanced efforts to boost college attendance and graduation among children from low-income homes, delayed childbearing and perhaps increased marriage among the less-educated, in-home parenting instruction, a higher wage floor, increases in the Child Tax Credit and/or the Earned Income Tax Credit, reduced income inequality, criminal justice reform so that fewer nonviolent offenders are incarcerated, and affirmative action based on family background.³⁵