Changing Opportunity: Rising Local Wealth Inequality and Growing Class Gaps in Income Mobility

Recent research documents widening class gaps in intergenerational income mobility. Children from low-income families in more recent cohorts attain lower incomes than their counterparts in earlier cohorts, while no comparable decline is observed among children from high-income families. This study examines whether rising local wealth inequality contributes to the growing class divide in income mobility. To do so, it combines newly published estimates of local wealth inequality (GEOWEALTH-US) with cohort-based measures of upward mobility from Opportunity Insights. First-difference models reveal a consistent, negative association between rising local wealth inequality and declining upward income mobility for low-income children, but no such relationship for their high-income peers. Rising local wealth inequality explains about one-fifth of the increase in class gaps in economic mobility.