|Darker colors indicate lower income mobility while lighter colors indicate higher mobility.|
An article at the NY Times about the study provides some information on factors that correlate with income mobility (and a really fascinating interactive map.
The team of researchers initially analyzed an enormous database of earnings records to study tax policy, hypothesizing that different local and state tax breaks might affect intergenerational mobility.As you can see from the map, some of the areas with the highest income mobility are rural areas. Using the interactive map, I think I've identified income mobility paradise. Move yourself up to Bismark, North Dakota where someone around 30, whose parents in the 1990s were at the bottom 1% of the income distribution, now have a 19% chance of being in the bottom quintile, a 21% chance of being in the 2nd quintile, a 21% chance of being in the 3rd, 19% chance of the 4th, and a 20% chance of being in the top 20% of incomes.
What they found surprised them, said Raj Chetty, one of the authors and the most recent winner of the John Bates Clark Medal, which the American Economic Association awards to the country’s best academic economist under the age of 40. The researchers concluded that larger tax credits for the poor and higher taxes on the affluent seemed to improve income mobility only slightly. The economists also found only modest or no correlation between mobility and the number of local colleges and their tuition rates or between mobility and the amount of extreme wealth in a region.
All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods.
Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups.
Regions with larger black populations had lower upward-mobility rates. But the researchers’ analysis suggested that this was not primarily because of their race. Both white and black residents of Atlanta have low upward mobility, for instance.
The authors emphasize that their data allowed them to identify only correlation, not causation. Other economists said that future studies will be important for sorting through the patterns in this new data.
Now, to be fair, before you buy a parka and move north, I kind of wonder if this may be thrown off a bit by out-migration from the area. Via google it looks like Bismark has been growing more slowly than the US as a whole, so it could be that people who are doing very poorly tend to leave. However, one could also imagine that the sorts of factors listed above by the researchers apply pretty heavily in the northern plains.