It turns out that people who tell you that all you have to do is work hard enough to achieve the “American Dream” are actually lying to you. Just like in business, location is critically important.
A recent report from the National Bureau of Economic Research determined that where one grows up has a large part in determining one’s upward mobility, or the chance to move up the income ladder. For reference, “absolute upward mobility” measures how children compare to their parents, while “relative mobility” measures the chances of moving up or down the income ladder in relation to their peers.
The report contains some interesting graphs about both absolute and relative mobility with some not so surprising geographic trends. Not surprisingly, children growing up in the Northeast and the West Coast have high rates of upward mobility, while the Southeast performs particularly poorly. The report also notes the detrimental effect of living the “Rust Belt”, with Cincinnati, Columbus and Detroit ranking among the worst 10 cities for upward mobility.
Interestingly, my hometown of Pittsburgh, a former “Rust Belt” city, ranked in the top 10 cities for upward mobility.