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Salt Lakers have better chance of moving up economic ladder than others, study says

Published: Monday, July 22 2013 8:25 p.m. MDT

Salt Lake City is among areas where those born into families who make $30,000 per year or less — the bottom fifth of income earners — have an 11.5 percent chance of making it into the top fifth — those who make $100,000 or more per year.

Jeffrey D. Allred, Deseret News

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SALT LAKE CITY — The ability to move up in life may depend on where you live.

A study released Monday by researchers at Harvard and the University of California, Berkeley, indicates that low-income people in specific geographic regions in the United States have a better chance at moving up the economic ladder than others.

Salt Lake City is among areas where those born into families who make $30,000 per year or less — the bottom fifth of income earners — have an 11.5 percent chance of making it into the top fifth — those who make $100,000 or more per year.

Vernal scored a percentage of 27.3 percent, the best area in the state.

Boston and New York were similar to Salt Lake City at almost 10 percent and fared better than areas in the South. There, chances for upward mobility are lower, with a 2.9 percent chance for those in the Memphis area, which includes portions of Mississpppi and Tennessee, and 4.0 percent for those in Atlanta.

The Great Plains area performed the best, with chances for upward mobility at 34.8 percent in Gettysburg, S.D., and 33.1 percent for children who grow up in the area of Williston, N.D.

"This is really a significant piece of research," said Pam Perlich, senior research economist in the Bureau of Economic and Business Research at the University of Utah.

The impact of tax policy on economic movement is controversial and would take time to full comprehend because there are "a lot of different layers and a lot of complexity."

However, there were some areas that researchers found were present in many of the mobile communities. Researchers found that five factors seemed to be associated with upward economic mobility:

Little income disparity in an area

Lower amounts of economic and racial division

Quality K-12 education, which includes good test scores and low rates of high school dropouts

Social and community involvement, including religious participation

The presence of strong families, for instance, more two-parent families

According to Perlich, these correlated areas make sense for mobility.

"The bigger your network of relationships, the better the opportunities for your life," she said.

Access to education, other ideas and the chance to have relationships with those who have different experiences are vital to moving up economically.

"Something bigger than your little tiny pod of your household," Perlich said.

As far as the correlated areas in the study, Utah is doing well with half of them, she said.

Utah's culture promotes two-parent homes, Perlich said. Utah had the highest percentage of two-parent households in the United States, with at least 61 percent, according to Census Bureau data between 2000 and 2010.

Utah culture also encourages civic and religious involvement and has a financial "safety net" of multi-generational families.

On the downside, from what Perlich has seen, educational funding is not on par with other areas in the nation. Utah also has a highly segregated economic environment.

"We could do better," she said.

The study's authors set out to test how certain tax policies, such at the Earned Income Tax Credit, mortgage interest breaks and local tax rates, impact the financial mobility of someone living in that area.

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