New research co-funded by the Russell Sage Foundation and the Pew Charitable Trusts contains sobering new evidence on the lack of social mobility in the United States. In their report, authors David Grusky and Pablo Mitnik (Stanford University) note that approximately half of parental income advantages in the United States are passed on to children, which is among the lowest estimates of economic mobility yet produced.

The study, "Economic Mobility in the United States," provides the most comprehensive assessment to date of the intergenerational transmission of economic advantage. The report draws on a new data set from tax returns and other administrative sources to overcome limitations that hampered previous studies. These findings make clear that children raised in families that are far apart on the income ladder can expect markedly different economic futures. As Joe Pinsker writes about the report in the Atlantic, “This means that the amount of money one makes can be roughly predicted by how much money one’s parents made, and that only gets truer as one moves along the earnings spectrum.”

RSF president Sheldon Danziger stated, “The report documents that public policies must do more to level the playing field so that children from low-income families have greater opportunities to compete in the 21st century economy. Over recent decades, the rising income and wealth of affluent parents have allowed them to increase investments in their children, from day care through college. At the same time, wages have stagnated for most workers and low-income families have struggled to pay for routine expenses.”

This report utilizes the intergenerational elasticity (IGE) to measure the share of economic advantage that is passed on to children. The IGE is typically between zero and one, with an IGE of zero implying that children from families of different socioeconomic status have the same expected income as one another, with no inherited income advantage or disadvantage. An IGE of one, on the other hand, implies that parental advantages are fully passed on.

The Russell Sage Foundation is pleased to announce the establishment of a Visiting Journalist Fellowship for projects related to the Foundation's mission of the "improvement of social and living conditions in the United States." The growth of economic inequality and its consequences, inequities in educational achievement and attainment, the social, political and economic impacts of immigration, and recent racial tensions over urban policing, are all examples of topics addressed by journalists that are central to RSF’s core programs.

Visiting Journalists will have an opportunity to work in residence at the Foundation for a period of 1-3 months and to interact with resident Visiting Scholars who might help inform the development of their projects.

The Foundation is now accepting Visiting Journalist applications for the 2016-17 year, with a deadline of September 1, 2015 at 11:59pm EST.

RSF author and former Visiting Scholar Jennifer Lee (University of California, Irvine) recently visited New Zealand to deliver a keynote address at the Population Association of New Zealand conference. During her time in Wellington, she participated in an interview at the U.S. Embassy and discussed diversity and population trends in America.

This feature is part of an ongoing RSF blog series, Work in Progress, which highlights some of the research of our current class of Visiting Scholars.

During her time in residence at the Foundation, Elizabeth Shermer (Loyola) has worked on a book that examines the origins of the contemporary crisis in public higher education. She argues that contrary to popular belief, state universities have always been subject to market forces. Shermer finds that there was never enough government funding to create a geographically-uniform system of mass higher education, and that as a result, public universities have long been influenced by private sector interests.

In a new interview with the Foundation, Shermer discussed the complex history of the rise of public education in the U.S. and recommended policies for expanding access to higher education for low-income students.

Q. Your current research challenges the popular myth of a "golden era" of public higher education by demonstrating how, from the very beginning, state schools experienced a number of funding problems and relied on different public-private partnerships to grow. Can you briefly flesh out the history of one state school to illustrate how public higher education's growth always required ties to a variety of different businesses and institutions?

The Russell Sage Foundation has partnered with the Robert Wood Johnson Foundation on an initiative that explores the social, economic and political effects of the Affordable Care Act (ACA). Research funded through this collaboration will address important questions about the consequences of health care reform in the U.S.—from financial security and family economic well-being, to labor supply and demand, participation in other public programs, family and children’s outcomes, differential effects by race/ethnicity/nativity or disability status, and politics and views of government.

RSF president Sheldon Danziger remarked: “I am very pleased that the Russell Sage Foundation is collaborating with the Robert Wood Johnson Foundation on this important new research venture. Our partnership with the RWJ Foundation will allow us to greatly expand our support for research in this area, extending the program into 2017.”

Since 1972, the Robert Wood Johnson Foundation has worked to identify the most pressing health issues facing America, with the understanding that health and health care are essential to the wellbeing and stability of U.S. society and the vitality of American families and communities. The partnership between RWJ and the Russell Sage Foundation promises to shed new light on the impact of one of the most significant regulatory overhauls of the U.S. health care system in decades.

Several new research projects in the Russell Sage Foundation’s core programs were funded at the Foundation’s June meeting of the Board of Trustees.

Awards approved in the Behavioral Economics program:

Mental Accounting and Fungibility of Money: Evidence from a Retail Panel
Jesse Shapiro (Harvard University) and Justine Hastings (Brown University)

Jesse Shapiro and Justine Hastings will complete a project that provide new tests of "mental accounting," or how households represent money in their financial decision-making. They will draw from unique panel data on seven years of customer purchases from a large grocery retailer in order to glean new insights into mental accounting through a real-world scenario.

Behavioral Biases and the Design of Student Loan Repayment Schemes
Lesley J. Turner, Kathleen Abraham, Emel Filiz-Ozbay, and Erkut Ozbay (University of Maryland)

Lesley J. Turner and colleagues will investigate the factors that affect students’ loan repayments, including the relationship between students’ expected earnings and their preference for income-based repayment plans, and whether students’ repayment behavior is affected by whether they voluntarily choose income-based plan or are instead assigned to one.