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Jimmy P. points to a new study on income mobility (“the most detailed portrait yet of income mobility in the United States”) featured in today’s New York Times, which uncovers significant geographic differences in the chances that a child raised in the bottom income quintile by family income will rise into the top income quintile.
According to the study:
The core sample of children used to calculate these local intergenerational mobility measures consists of children who were born in 1980 or 1981 and are U.S. citizens as of 2013. We used family measures of pre-tax income both for parents and children (when adults). We measure children’s household income in 2010-2011, when they are approximately 30 years old. We measure their parents’ household income between 1996 and 2000.
From the NY Times article:
These comparisons provide some of the most powerful evidence so far about the factors that seem to drive people’s chances of rising beyond the station of their birth, including education, family structure and the economic layout of metropolitan areas.
And here’s maybe one other very important factor for intergenerational upward income mobility in America: proximity to shale oil fields like the Bakken Formation in North Dakota.
In the map above from the NY Times article, the dark blue areas are those geographic regions with the greatest levels of upward income mobility, and it shouldn’t be a surprise that western North Dakota leads the country with the highest level of upward income mobility and the greatest chances that a child who was in the bottom fifth by family income in the 1980s has now risen to the top income quintile in 2010-2011. Here are some results of the study:
1. Almost one out of every three children from Williston, North Dakota, at the epicenter of the Bakken oil field, whose parents were in the bottom income quintile had risen into the top income quintile by 2010-2011, at age 30. The 33.1% chance for Williston children to rise from the bottom 20% to the top 20% is the highest in the nation for any geographic area. The high level of income mobility in Williston is reflected in the fact that the surrounding Williams County area of North Dakota has the lowest county jobless rate in the country at only 0.70% for May.
2. Following Williston is Dickinson, North Dakota, where the chance of a child raised in the bottom income quintile rising to the top 20% is 31.4%, which is the second highest level of upward income mobility in the country by geographic area.
3. Other geographic areas in the Bakken oil region like the Lemmon area, Ekalaka area and Bowman area lead the country with the highest chances of moving from the bottom to the top income quintile at around 30%.
MP: We can now add the highest level of upward income mobility in the country to the long list of significant economic benefits that the shale oil boom is bringing to North Dakota, especially to the western part of the state where the Bakken Formation is bringing wealth, prosperity, jobs and upward income mobility to America’s “economic miracle state.”
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