Category Archives: michigan state university

Stalled upward social mobility in America [UPDATED 2/14/12]

Flickr photo by AtleBrunvoll

Rana Foroohar’s cover story in TIME (Nov. 2011) is entitled What Ever Happened to Upward Mobility? Her answer is that it has stalled in the US and fallen behind rates of upward mobility in the US, Sweden or Denmark.  According to Foroohar (and based on a Pew study), a male born in the 1970s into the bottom fifth of the wealth distribution had only a 17% chance of making it to the top wealth quintile.  And while 50% of young males in this low-wealth quintile remained stuck there in the US, it was only 30% in UK or 25% in Denmark and Sweden, so upward mobility was much higher in those nations.  [Swedish economist Markus Jantti led the research project that uncovered these numbers.]

Foroohar (after consulting experts from places like Goldman Sachs) says that China and other emerging countries are driving inequality by taking away good middle class US jobs.   Foroohar believes that the answer lies in more progressive tax rates (with fewer loopholes) and greater investments in public education (which is the engine of economic mobility).

Fareed Zakaria also has three pieces on this: “The Downward Path of Upward Mobility” (Wash. Post op-ed, 11/10/11), a CNN video entitled “Fix Education, Restore Social Mobility” (about how lack of investment in education causing stagnating upward mobility is at heart of Occupy Wall Street movement), and “When will we learn” (TIME, 11/14/11).

Bhaskar Mazumder, of the Chicago Fed, highlights research that he believes shows a decrease in US social mobility from 1980-1990 and then growing less rapidly from 1990-2000 (based on studies of brothers). Mazumder notes that mobility measures are by methodological approach “backward-looking” since they impose a several decade lag before one learns of corrosive influences in society for social mobility; he  notes  that “the gap in children’s academic performance between high- and low-income families has widened significantly over the last few decades. If this trend persists, it would point to reduced intergenerational economic mobility going forward.”

We have been doing work on the connection between income inequality and social inequality among youth (that exacerbates the test score gaps) and will report on that later, but suffice it say that we find a connection between the “blue inequality” (income inequality) and “red inequality” (the ability of college graduates to pass on advantages from a generation to another) that David Brooks writes about.

In November 2011, a variety of non-profit, corporate, academic and media leaders convened to discuss social mobility in the Opportunity Nation summit.  Opportunity Nation has released an Opportunity Index that enables you look state by state or county by county to see how that locality is doing in terms of economic opportunity. And you can see videos of some of the speakers here.  Rick Warren cited an eye-opening statistic: 25% of Anglo kids, 50% of Hispanic kids, & 75% of black kids are growing up today without a stable father in the home (these are out of wedlock births).  This work is picked up in Charles Murray’s Coming Apart and in Nick Kristoff’s “The White Underclass“.

And interestingly, even conservative media venues like the National Review and the FrumForum (here and here) are discussing the decline of social mobility as noted in “Harder for Americans to Rise From Lower Rungs“, citing Republican experts like John Bridgeland.  Even Presidential candidate Rick Santorum has admitted that social mobility up into the middle class is higher in Europe than in the US. Excerpt from Scott Winship’s piece in the National Review here:

The Economic Mobility Project/Brookings analyses break the parent and child generations into fifths on the basis of each generation’s income distribution. If being raised in the bottom fifth were not a disadvantage and socioeconomic outcomes were random, we would expect to see 20 percent of Americans who started in the bottom fifth remain there as adults, while 20 percent would end up in each of the other fifths. Instead, about 40 percent are unable to escape the bottom fifth. This trend holds true for other measures of mobility: About 40 percent of men will end up in low-skill work if their fathers had similar jobs, and about 40 percent will end up in the bottom fifth of family wealth (as opposed to income) if that’s where their parents were.

Is 40 percent a good or a bad number? On first reflection, it may seem impressive that 60 percent of those starting out in the bottom make it out. But most of them do not make it far out. Only a third make it to the top three fifths. Whether this is a level of upward mobility with which we should be satisfied is a question usefully approached by way of the following thought experiment: If you’re reading this essay, chances are pretty good that your household income puts you in one of the top two fifths, or that you can expect to be there at age 40. (We’re talking about roughly $90,000 for an entire household.) How would you feel about your child’s having only a 17 percent chance of achieving the equivalent status as an adult? That’s how many kids with parents in the bottom fifth around 1970 made it to the top two-fifths by the early 2000s. In fact, if the last generation is any guide, your child growing up in the top two-fifths today will have a 60 percent chance of being in the top two fifths as an adult. That’s the impact of picking the right parents — increasing the chances of ending up middle- to upper-middle class by a factor of three or four.

See somewhat related Social Capital blog piece on increased residential income segregation.

Read Paul Krugman’s excellent “We are the 99.9%” (NYT, 11/24/11)

Read Nick Kristof’s excellent piece “Occupy the Agenda” (NY Times, 11/19/11)

Listen to Steven Haider (Michigan State Univ. economist) on Michigan Public Radio (11/18/11) discussing the myth of upward mobility in America.

Other pieces on this topic:

TIME Magazine: “The Land of Opportunity” by Richard Stengel, 11/14/11

Washington Post-ABC News Poll: http://www.washingtonpost.com/wp-srv/politics/polls/postabcpoll_110311.html   [see questions 16-18]

December 2011 OECD report Divided We Stand: Why Inequality Keeps Rising on how inequality among OECD countries is at a record high over the past 30 years and demands action.

The reports that Zakaria uses to show that mobility is lower in US than in Europe are:
– OECD 2010 report: http://www.oecd.org/dataoecd/2/7/45002641.pdf
– German Institute for the Study of Labor report (2006): http://ftp.iza.org/dp1938.pdf

- Professor Miles Corak (economist at Univ. of Ottawa) compared rates of mobility in a review of over 50 studies spanning nine countries.

- See Scott Winship’s testimony to Senate Budget Committee (Feb. 9, 2012) on inequality and social mobility, and see Jared Bernstein’s and Heather Boushey’s as well.

Two of most startling charts of testimony were one by CBO showing how the income of the top 1% is the one cohort that has done well over the last 40 years in the US economy:

And one showing that, unlike in most countries where progressive taxation is used to curb the excessive inequalities of the market and ease the distribution somewhat, the tax and transfer system in the US actually make inequality WORSE.

Conflicting data on Facebook: good for university attachment, bad for Cause-related fundraising

(Facebook Wheel of Friendship - photo by jurvetson)

(Facebook Wheel of Friendship - photo by jurvetson)

Despite the online fundraising success of the Obama campaign, the Washington Post reports that Facebook Causes, “hugely popular among nonprofit organizations seeking to raise money online, has been largely ineffective in its first two years, trailing direct mail, fundraising events and other more traditional methods of soliciting contributions.” Only the Nature Conservancy and Students for a Free Tibet have raised more than $100,000 on Facebook Causes, and most of the 179,000 non-profits listed on Facebook don’t even make $1,000 from the site.  This is more depressing when you realize that Facebook usage has swelled to over 200 million.  Twenty five million Facebook users show their affinity through Facebook Causes and their belief in the environment or women’s rights or freedom of choice, but fewer than 1% of such users actually donate.

Other experiments have shown that 1-3% of a nonprofit group’s e-mail list donate money when solicited, at an average of about $80 per person. That is more than 44 times the rate at which such users are donating online through Facebook Causes.

Note: one reader, Will Coley, brought to my attention two blog postings contesting the Washington Post report.  See Fine Blog and  Beth’s Blog.  I don’t find these refutations all that persuasive; sure there are lot of Facebook Causes that are not NPOs (so the donation/cause is not the right statistic) and Facebook has a lot of young users (who are not big donors), but the original motivation of Facebook Causes was to help harness social networks to raise a lot for non-profits, and this has largely been a failure, although maybe it helps Facebook users to identify themselves with other users that share their values.

The more hopeful finding about Facebook comes from a recent paper “Social Capital, Self Esteem and the Use of Online Social Networks”.  [This is a longitudinal follow-up paper to an earlier paper by Ellison, Steinfield, and Lampe in 2007 called “The Benefits of Facebook Friends: Social Capital and College Students’ Use of Online Social Network Sites.“] Ellison et al. found in panel survey data they gathered at Michigan State University (MSU) stronger evidence that Facebook usage predicted later increased levels of “bridging social capital” than that “bridging social capital” caused increased Facebook use.  [Note: see below on their strange measure of bridging social capital.]

It’s an intriguing finding, although one should note that the size of the panel is quite small (92 students completed the earlier and later survey) and there was attrition both in whom they originally asked to do the survey (where only 277 out of 800 students contacted responded) and then secondary attrition when only a third of those 277 students then filled out the follow-up survey. [Ellison et al. note that the 92 seemed demographically representative of the 277 students, but one can never know about hidden attributes that might have explained why people would stick with the survey and also explained why these same people would have made more friends.]

Moreover, one would suppose that the power of Facebook to build social capital and bridging social capital is probably higher at a university setting where most of the e-friendships are in the same town, and one is thus more likely to encounter budding Facebook friends in real life.  (Almost all research shows that it is easier to build trust and stronger ties face-to-face, so having a strong geographic concentration of Facebook friends and ‘near friends’,  in an environment where new students are establish friends,  should provide Facebook with the strongest dynamic for friend-building.)

The paper, as I noted in a blog post on the earlier study, uses weird measures of bridging social capital.  Bridging social capital is supposed to measure the degree to which one has social friendships to people of a different religion, or social class, or race or ethnicity.  Their “bridging” measures are more about attachment to MSU as a community and include: “I feel I am part of the MSU community”, “I am interested in what goes on at MSU”, “MSU is a good place to be”, “I would be willing to contribute money to MSU after graduation”, “Interacting with people at MSU makes me want to try new things”, etc.    I definitely had loyalty to my college when I was there, but I don’t know that this necessarily says a whit about how diverse my friendships were there.

With this unusual measure of “bridging social capital”, the researchers found that both higher-esteem and lower-esteem students were likely to benefit by increased “bridging social capital” (i.e., have a stronger attachment to MSU) from Facebook use, although this effect was highest for students with low self-esteem at the beginning of the study.  And they found that Facebook produced greater attachment to MSU even after controlling for general Internet use and measures of psychological well-being.

While their survey doesn’t directly get at this question, it seems somewhat different than the common findings with technology that the socially-rich get richer, and, rather than leveling the playing field, it may fuerther tilt it.  Ellison et al. don’t directly measure level of social capital at the outset, but in their finding that those low in self-esteem may benefit the most (at least in attachment to MSU), it suggests that at least in this domain the socially unattached may benefit more.

For more information, see :

Charles Steinfield, Nicole B. Ellison, Cliff Lampe. Social capital, self-esteem, and use of online social network sites: A longitudinal analysis. Journal of Applied Psychology 29 (2008) 434–445

To Nonprofits Seeking Cash, Facebook App Isn’t So Green: Though Popular, ‘Causes’ Ineffective for Fundraising by Kim Hart and Megan Greenwell (Wash Post, 4/22/09)