Category Archives: economics

Economic Geography in the USA

2014/01/23
An article in The Atlantic, written by Derek Thompson, discusses the results from a non peer-reviewed paper from the National Bureau of Economic Research. This working paper is circulated for discussion and comment purposes.

Here is the report: Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States. Written BY Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez. Working Paper 19843.

The Atlantic article uses to figures from the NBER paper to help us visualize the regional variation in upward mobility. Absolute upward mobility measures how children stack up to their parents. Relative mobility measures their chances of moving up or down the income ladder relative to their peers. Lighter colors suggest higher mobility.

Absolute Upward Mobility:
Absolute Upward Mobility

Relative Upward Mobility:
Relative Upward Mobility

Here are some observations made in the appendix and highlighted by Thompson:

  1. The most upwardly mobile region is the Great Plains (followed by the West Coast and the Northeast)
  2. The most upwardly mobile cities are Salt Lake City, for moving into the middle class, and San Jose, Ca., for moving into the top quintile. Here are the top ten cities for the American Dream, ranked by absolute (child vs. parent) upward mobility.
  3. The losers are the Southeast and Rust Belt (the entire regions, basically) and Charlotte, North Carolina. Here are the ten worst cities for upward mobility.
  4. Although the map looks like it’s colored by region, there are some huge differences between cities and areas that are just miles away from each other. For example, many Texas areas have high rates of upward mobility, unlike the entire South. Pennsylvania has many upwardly mobile cities, but Ohio fares poorly. Ohio has much lower rates of upward mobility than Pennsylvania.
  5. The race composition of your area seems to matter—not just the race of your family. “Both blacks and whites living in areas with large African-American populations have lower rates of upward income mobility,” the researchers write.