Downward Mobility from the Middle Class: Waking Up from the American Dream

The idea that children will grow up to be better off than their parents is a central component of the American Dream, and sustains American optimism. However, Downward Mobility from the Middle Class: Waking up from the American Dream finds that a middle-class upbringing does not guarantee the same status over the course of a lifetime. A third of Americans raised in the middle class—defined here as those between the 30th and 70th percentiles of the income distribution—fall out of the middle as adults. The data also show differences in rates of downward mobility from the middle based on both family background and personal characteristics.

The research for this report was undertaken to answer critical questions about what accounts for downward mobility from the middle class, and how those factors influence people differently depending on their race and gender. Four main findings were identified:

• Marital status, education, test scores and drug use have a strong influence on whether a middle-class child loses economic ground as an adult
• Race is a factor in who falls out of the middle class, but only for men
• There is a gender gap in downward mobility from the middle, but it is driven entirely by a disparity between white men and white women
• Differences in average test scores are the most important observable racial difference in accounting for the large downward mobility gap between black men and white men, but none of the factors examined in the report sheds light on the gap between white men and white women