Upward mobility between generations ain’t what we thought.

 As political rhetoric containing promises of education, social opportunities and other development for disadvantaged people continues to fill the airwaves, economics researchers have developed state-of-the-art statistical methods that uncover the impact of different aspects of upward mobility (or lack thereof), aside from parental income. The new research appears in the Journal of Business & Economic Statistics.

What the researchers say: Historically, mobility between generations has been measured by something called “intergenerational elasticity of income (IGE)”—an estimate that has varied over the years. “Surprisingly, most efforts to measure intergenerational mobility pay relatively little attention to the mechanisms that underlie links between offspring and parental income,” said the lead author. “This new research expands on mobility calculations by focusing on factors such as neighborhood and parental cognitive and non-cognitive skills as determinants of mobility.”

To calculate more precise figures, researchers used three data sets: the Panel Study of Income Dynamics (PSID) to address earnings of offspring over time; the National Longitudinal Survey of Youth (NLSY) to study how family background affects the mobility prospects of individuals; and US administrative data at the commuting zone (CZ) level to explore determinants of upward mobility experiences of lower income families across CZs.

Some of their key findings include:

Households of sons of fathers who didn’t complete high school find themselves in a status trap characterized by lower levels of mobility and long-run mean incomes. (Note that this is irrespective of the education level of the son.)

Daughters coming from families with sufficiently high incomes experience high levels of earnings mobility. At the same time those daughters who are outside of the least achieving, but coming from families with low family incomes, still face relatively high barriers to mobility.

Income outcomes for daughters in households with mothers who have high cognitive abilities, but low self-esteem, exhibit the highest intergenerational persistence (i.e. little upward mobility).

For daughters who have mothers with high levels of education (i.e., above 12 years of schooling), but who themselves have lower levels of cognitive abilities, increased levels of self-esteem are actually associated with lower earnings. This finding will force us to challenge many of our accepted ideas as to the benefits of self-esteem.

For daughters with high-achieving mothers, and who possess high cognitive abilities, surprisingly, greater openness to new experiences and conscientiousness leads to lower earnings. This is a real eye-opener, a WOW! of a finding.

Impact of segregation (both racial and economic) on upward mobility is actually larger for less economically segregated CZs. This is surprising, one might think that the reverse would be true.

The degree of social capital appears to be more important in determining the upward mobility prospects of residents of highly economically segregated CZs. This supports much of which we have been saying over the years, thank goodness!

The quality of K-12 education is now highly significant in explaining upward mobility for residents of highly economically segregated CZs. This finding is, perhaps, the finding most in line with conventional wisdom on the subject.

So what? Many of these findings are quite contrary to accepted wisdom. They are also contrary to the assumptions behind government policies and, often, corporate hiring. They should be read with care by all because they will force us to look at each individual more carefully and tailor policies and corporate training to their particular circumstances.

One of the really interesting things that we are learning is that with humans there is no “one-size fits all.” Learning, training, promotion and hiring must all be individualized: We must take more into account than what we thought was needed based on our generally-accepted assumptions.

What now?  The finding of a few years ago—that 90% of what we assume about any individual is wrong in some way—should form the basis of all our interactions with other people. Don’t assume—be curious. Don’t assume—ask!