Economic Mobility Better in Northeast, Worse in South

The key findings of the study used the national earnings distribution and aggregate results from all three mobility measures to identify those states where economic mobility differs from the national average on at least two measures.

• Eight states, primarily on the Eastern seaboard, have consistently higher upward and lower downward mobility compared with the nation as a whole. Maryland, New Jersey and New York have better economic mobility than the national average on all three measures investigated, while Connecticut, Massachusetts, Pennsylvania, Michigan and Utah have better mobility on two measures.
• Nine Southern states have consistently lower upward and higher downward mobility compared with the nation as a whole. Louisiana, Oklahoma and South Carolina have worse economic mobility than the national average on all three measures investigated; Alabama, Florida, Kentucky, Mississippi, North Carolina and Texas have worse mobility on two measures.
• Geographic mobility—whether people born in a particular state stayed there or moved elsewhere—does not drive state differences in economic mobility. States have similar rates of economic mobility regardless of whether Americans were grouped by their birth states or the states they were living in at the time of the survey.

The research focused on Americans born between 1943 and 1958, with the most recent data coming from 2007. The study investigated their mobility prospects during their prime working years, the spans between ages 35 and 39 and 45 and 49. Data were drawn from the Survey of Income and Program Participation and the Social Security Administration.

Interestingly, the findings show little relationship with other recent research focusing on one path to upward mobility: starting a small business. 

In a study by the Small Business & Entrepreneurship Council that focused on the states with the best and worst tax incentives for small businesses, New Jersey and New York ranked third and fourth worst respectively, while Southern states were well-represented. A study by Thumbtack.com, a site that connects small business providers with clients, found that businesses run by political conservatives, a group with a stronger foothold in the South than the Northeast, were 17% healthier than those run by liberals.

—————–

More coverage from AdvisorOne:

• Why Entrepreneurs Love Dallas and Hate L.A.
• 10 Worst Tax States for Small Business
• 10 Best Tax States for Small Business
• Top 10 Worst Tax States for Retirees
• Top 10 Surprisingly Best Cities for Retirees