Equal Opportunities
Equality of Opportunity
The United States has traditionally prided itself on being a country that provides “equality of opportunity”. By that is usually meant that individuals with ability and ambition who are born into families with modest means and education have a good chance of succeeding when they become adults. The experiences of different generations of immigrants coming from many countries have supported this view, for their children and grandchildren often succeeded very well as they blended into the mainstream of American life.
That rosy view of opportunities in the US is being challenged by a growing belief that opportunities are declining for children from modest backgrounds. This belief is partly based on the strong evidence that human capital, including education, IQ and other measures of “ability”, have become much more important in determining economic success than was the case in the past. This new economic environment favors educated parents because they have both greater schooling and also higher average cognitive and non-cognitive skills.
Better-educated and higher income parents have always spent more on their children’s education and training, including quality of schools and after school activities. However, this gap in spending between families has grown in recent decades as the relation between so-called “enrichment” expenditures on children and family income has become much steeper. In addition, better off families complement their spending of money on their children by also spending more time with children through teaching them, helping with homework, and in other ways.
Countering this growing advantage of children from better off families is that different levels of government are doing more than in the past to improve education opportunities from children from poorer backgrounds. The many policies that work in this direction include subsidized pre kindergarten activities, head start programs, and greater attention to the public schools attended by poorer children.
Despite various claims about declining opportunities in the US, and the indirect evidence that supports this conclusion, there is little direct supporting evidence. Many commentators have confused the strong evidence that inequality in the distribution of earnings and other incomes has increased greatly since 1980 with declining opportunity for children from poorer families. This is a jump in logic since greater inequality of income is consistent with stable or even growing opportunities for these children.
To be sure, in comparisons among countries, greater inequality of incomes in fact does tend to go along with fewer opportunities for poorer children to rise up in the income scale. However, this finding does not imply that countries that have growing inequality in the distribution of incomes also have falling opportunities.
The direct evidence on what is happening over time to opportunities provides a mixed picture. On the one hand is the evidence on the IGE, which measures the average effect on children’s earnings of higher parental earnings. For example, an IGE of 0.5 means that when parents earnings are say 10% above average, their children’s earnings tend to be 5% above average. Most of the evidence suggests that the IGE in the United States changed little as inequality grew during the past 30 years. This direct evidence is limited in part because different studies provide a range for the IGE in the US from about 0.3 to about 0.7.
The other hand comes from work on what has happened over time between the performances on achievement tests of children from families at the lower and upper ends of the income distribution. In particular, a study in progress by a graduate student at the University of Chicago, Eric Nielsen, compares the performances of children in the late 1970s and 1990s that have parents in the top and bottom 20 percentiles of the income distribution. To make the comparisons he uses scores on the Armed Forces Qualifying Test (AFQT), a widely used measure of achievement. Using (“ordinal”) methods of comparison that he developed, Nielsen finds a considerable narrowing over this time period between the performances on this test of children from the high and low ends of the income distribution.
It is somewhat puzzling that the performance gap on achievement tests has apparently narrowed while the gap between high and low income families in their spending of time and money on their children’s human capital has apparently widened. One important piece of missing evidence is on possible changes over time in the link between the AFQT performance and adult earnings.
In summary, it is far from clear whether opportunities of children from poorer families have been declining in the US. Still, since abundant opportunity for these children is an important goal of an efficient and attractive society, more effort might be needed to improve their opportunities through better schools, better teachers, and perhaps in other ways as well.
Author: Becker
Income inequality
Income inequality in the United States has grown substantially since the 1970s, to the point where today the bottom 20 percent of the nation’s households have 5 percent of total income, the top 10 percent about 50 percent, and the top 1 percent more than 20 percent. The question is whether such a high level of inequality is likely to reduce what is called “relative mobility,” or the likelihood that members of one generation of a family and members of the next generation will end up at different points in the income distribution. (…)
A 2011 study by Scott Winship for the Brookings Institution reports that the likelihood that an American will rank higher in the income distribution than his parents is lower than in most other wealthy countries. The report states: “If being raised in the bottom fifth [of the income distribution] 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.” Income inequality is greater in the United States than in our peer countries, and may be responsible for our lower relative mobility. In the limit, an income distribution that produces a very wealthy top tier of earners and a very large bottom tier of poor or low-income families may reduce movement between the tiers in subsequent generations.
Author: Posner
Finding the law: Equal Opportunities in the U.S. Code
A collection of general and permanent laws relating to equal opportunities, passed by the United States Congress, are organized by subject matter arrangements in the United States Code (U.S.C.; this label examines equal opportunities topics), to make them easy to use (usually, organized by legal areas into Titles, Chapters and Sections). The platform provides introductory material to the U.S. Code, and cross references to case law. View the U.S. Code’s table of contents here.
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