A team of top academic economists recently released the results of their study of the economic impact of tax expenditures on intergenerational mobility.  Raj Chetty (Harvard University), Nathaniel Hendren (Harvard University), Patrick Kline (University of California Berkeley), and Emmanuel Saez (University of California Berkeley) compiled millions of anonymous earnings records into a larger and richer dataset than previously available, which allowed them to construct measures of relative and absolute mobility for 741 commuting zones (derived from Census data, commuting zones are geographical aggregations of counties based on commuting patterns) in the US.  Their analyses reveal substantial variation in mobility across areas--variation that appears unrelated to differences in cost of living, race, or economic growth.





To look up statistics for a specific city or area, use the interactive version of these maps created by the New York Times.

To understand the drivers of this variation, the researchers examined the impact of tax expenditures, as well as other factors.  Their findings suggest that tax policies account for some of the variation in outcomes across areas (local tax rates having more impact than state Earned Income Tax Credit policies) but other factors may be equally as important.  Among those, income inequality, economic and residential segregation, and prevalence of children raised by single parents were negatively correlated with intergenerational mobility, while K-12 school quality and social capital were positively associated with mobility.

The researchers caution against interpreting these findings as causal effects, explaining that areas with these characteristics "may also have other differences that could be the root cause driving the differences in children's outcomes."  What the study does show is that "[t]here is substantial variation in the United States in the prospects for escaping poverty.  There are some areas [...] where a child's chances of success do not depend heavily on his or her parents' income."