The United States takes pride in being the land of equal opportunity, where everyone has a fair chance at success if they work hard and play by the rules. Strong economic growth made that dream a reality for many prior generations of Americans, including those who started out poor. But over the past three decades the United States has experienced deteriorating economic growth and a long, slow rise in economic inequality. As a result, the fruits of economic growth have gone largely to the wealthy, median incomes have stagnated, and the poor have increasingly been left behind.
In 2001, the Russell Sage Foundation together with the Carnegie Corporation of New York initiated a program of research on Social Inequality designed to examine the implications of rising economic inequality across many areas of social life – the well being of families, the parental resources available to young children, the quality of education from preschool to college, the chances of finding secure and satisfying work, the quality of health care and health outcomes, and the effectiveness of participation in the democratic process. For each of these domains, the Foundation supported descriptive research that sought to establish whether those groups that have increasingly been left behind economically have also lost ground in other ways that limit their full participation in society and make it more difficult for their children to compete successfully with the children of the more advantaged. Does rising economic inequality, once underway, have social effects that tend to entrench and amplify economic differences?
This first stage of research has been summarized in the authoritative volume, Social Inequality, published by the Foundation in 2004. In addition, a convenient chart book, which illustrates the project’s principal research findings on inequality in accessible, graphic form, and more than 70 working papers produced by the project are available for public use on this site. Although these results resist simple summary, they tend to show large, persistent differences in the quality of the lives led by rich and poor. Some of these social differences have grown larger during the recent period of rising inequality; many have remained stable; but none has grown smaller unless specific public policies were aimed at reducing the disparities between rich and poor.
In the subsequent stages of the program, the Foundation has turned to in-depth examinations of the key institutions the United States relies on to counteract market-driven inequality: public education and the democratic electoral system. We have been interested in how these institutions have performed during the recent run-up in economic inequality. Have the public schools been able to provide equal educational opportunities despite growing differences in family resources, neighborhood quality, and local job prospects? Has the political system effectively transferred resources from those who have benefitted from rising inequality to those who have not? And, overall, how well have American institutions performed – compared to other countries – in moderating inequality and providing something like equal opportunity for all Americans?
Social Inequality and Educational Disadvantage
In today’s economy, the economic rewards to graduating from college have never been higher. Between 1977 and 2007 the inflation-adjusted wages of college graduates grew by 25 percent, while the wages of high school graduates increased by only one percent, and those of high school dropouts fell by 13 percent. At the same time, growing income inequality has increased the gap between the resources rich and poor families have available to invest in their children’s education. Not surprisingly, the the gap in educational attainment between the rich and the poor has also increased significantly over the past thirty years – with potentially dire consequences for the future economic mobility of children from less-advantaged families.
In 2008, the Russell Sage Foundation, in cooperation with the Lyle M. Spencer Foundation, initiated an ambitious group project, Social Inequality and Educational Disadvantage, to investigate the extent to which economic inequality may be undermining schools’ effectiveness in providing all students with an equal chance to get ahead. Under the direction of Greg Duncan (University of California, Irvine) and Richard J. Murnane (Harvard University), the project has yielded 25 research papers that chart the dimensions of educational inequality in the United States and explore how school performance and educational achievement are affected by the social and economic conditions surrounding schools. Schools where many students perform below standards are often located in neighborhoods with substantial crime problems, higher residential turnover, and fewer job opportunities than their wealthier counterparts. The families of students in these schools are more likely to be headed by single parents, by parents with limited educational backgrounds, or parents whose native language is not English. As a result, these schools face higher rates of student turnover, greater problems in recruiting high-quality teachers, more difficulty in creating safe learning environments, greater demands for special education, and a greater need to provide instruction in English as a second language. Despite efforts to equalize financial expenditures per pupil, these schools are increasingly unable to deliver anything approximating an equal chance for a quality education.
The project will produce two books exploring schools’ efforts to provide equal educational opportunity for all students. The first book, edited by Duncan and Murnane, Whither Opportunity? Rising Inequality and the Uncertain Life Chances of Low-Income Children (Fall 2011), examines how such factors as family functioning, neighborhood conditions, and local labor markets impact schools’ ability to improve the academic achievement and educational attainment of disadvantaged students. The second book, intended for a more general audience, will seek to raise public awareness of educational disadvantage in the United States by bringing together the research that documents this growing national problem and suggesting new policies aimed at reducing educational inequality.
According to influential theories of democracy, rising inequality should lead to a ground swell of popular support for legislation that taxes the rich and redistributes the proceeds to those below them on the economic ladder. But over the past 30 years taxes on the rich have been slashed, even as social programs to aid the poor have been steadily rolled back. The nation’s political system in principle allows the rich and poor an equal voice in establishing the rules under which people compete in the marketplace and in the investments we make in public programs to help offset market-driven inequality. But with a growing concentration of national income at the top, the wealthy may be able to exert more influence over the political process, over-riding the interests of poor and middle-income voters. If so, public policy may well end up favoring the economic interests of wealthier constituents, further entrenching economic inequality.
In 2006 the Foundation issued a Request for Proposals as part of a new research initiative on the Politics of Inequality. This ongoing initiative is an effort to improve our understanding of how rising inequality has influenced the U.S. political process and the policies it has produced. The initiative is concerned with a wide range of questions: Have government policies become more or less effective in offsetting the market-driven inequality of the last thirty years? Have poor voters become disinterested in a political system that appears more attuned to the interests of the rich, or are they simply too hard pressed by work and family responsibilities to take the time to vote? Are the rich more influential because of the increasing importance of money to electoral success? If so, how exactly does money exert its influence on the legislative process?
A number of projects examining the intersection of politics and inequality have been completed and more are underway. Nolan McCarty and Keith Poole of Princeton University and Howard Rosenthal of New York University argue in their RSF-supported book Polarized America: The Dance of Ideology and Unequal Riches (MIT Press, 2007) that rising economic inequality in the U.S. has led to more extreme polarization between the nation’s two political parties, with one party favoring the interests of the rich and the other the interests of the poor. As the parties square off in defense of vested interests at either end of the income distribution, gridlock ensues thus limiting the ability of the political system to pass legislation to counteract the social effects of rising inequality. Larry M. Bartels of Princeton University examines the political causes and consequences of the growing gap between rich and poor in Unequal Democracy: The Political Economy of the New Gilded Age (co-published by RSF and Princeton University Press, 2007). Bartels demonstrates elected officials’ tendency to be more responsive to the concerns of the rich and argues that increasing inequality is not simply the result of economic forces, but the product of policy choices in a political system dominated by the interests of the wealthy. In closely related work, an RSF-supported study of 2,000 public opinion surveys by Martin Gilens of Princeton University has shown a high correlation between the political interests of high-income Americans and subsequent federal legislation.
Cross-National Research on the Intergenerational Transmission of Advantage
The greater the disparity between a society’s rich and poor the greater the inequality in the advantages enjoyed by their children. The United States, with the highest rate of inequality among advanced economies, has the lowest level of economic mobility from one generation to the next. But more surprisingly, perhaps, the United States has even less intergenerational mobility than its high level of inequality would predict. Other countries have shown more success at moderating the effects of inequality on mobility – possibly by making public investments in education, health, and family well-being that offset the private advantages of the wealthy. What can the United States learn from these other countries about how to provide children from disadvantaged backgrounds an equal chance in life? If some countries are doing a better job at equalizing opportunity, at what stage in individual development do the effects of public investments show up? Are early investments in child health and family well-being of primary importance, or are school systems that impact individuals at later stages more effective? These are the motivating questions of the third stage of the Foundation’s Social Inequality Program, the Cross-National Research on the Intergenerational Transmission of Advantage, launched in November 2009.
Led by John Ermisch of the University of Sussex, U.K, Markus Jäntti of Stockholm University, and Timothy Smeeding of the University of Wisconsin-Madison, thirty-eight researchers in ten countries are conducting fourteen coordinated studies on how family resources are correlated with the development of mobility-relevant skills and how those relationships may differ over the life course and between countries. What is the relationship, for example, between parental socioeconomic status and children’s cognitive skills? Do these relationships change as children enter and progress through school? Initial results indicate that earlier interventions can have the greatest impact. Data from France, for example, show that preschool attendance has significant effects on later-life outcomes, such as educational achievement and job attainment.
The overall study has important longitudinal and cross-national components, allowing the researchers a deeper understanding of national policies that can limit the effects of inequality on mobility. The study is nearing completion, and findings were briefly previewed in a Pew Economic Mobility Project fact sheet. A comprehensive edited volume, From Parents to Children: The Intergenerational Transmission of Advantage will published in 2012 and details the study's research and results.
For information on how to apply for a research award in the Social Inequality program, visit our How to Apply page.