Will Your Children Live Better Than You Do?

by Joe Plemon on September 14, 2011

The authors of the recently released study, Downward Mobility from the Middle Class: Waking up from the American Dream” challenge the widely accepted idea that the economy is improving to the point where the  next generation of the world’s population has a high chance of living better than their parents. This may be, at least in part, due to decisions made by parents.

Some definitions:

  • Downward mobility” is the technical term describing the act of a person moving from one economic class down to a lower class.
  • The “middle economic class” is defined as being in the 30th to 70th percentile in economic prosperity.  Obviously, the middle class encompasses a large number of people.

This study focused on those who fell from the middle class to the lower economic class — often described as poverty.  The problem is this: once a person falls to the lower classes, moving back up is difficult and becomes increasingly difficult for ensuing generations.  Certain life choices as well as characteristics out of a person’s control are shown to have an effect on their ability to hold their economic class.

Based on this study, what are some choices that help both you and your children?

Get an Education

According to the study, women who were raised in a middle class household and only received a high school education are 14% to 16% more likely to live their adult lives in the lower economic class; men are 7% to 15% more likely. Even some college education increases a person’s chances of remaining in the middle class.

Get Married and Stay Married

Women who are divorced, widowed, or separated are 31% to 36% more likely to make a downward move;  never married women are 16% to 19%. Men who were once married are 13% more likely to live in a lower economic class, while men who never marry are 6% to 10% more likely.

What are some of the factors you can’t (and probably don’t want to) control?

If you are an African American male you are 38% more likely to fall down a class compared with 21% of Caucasian men. For women, race was not found to be a factor.   Thirty percent of white women, but only 21% of white men can expect downward mobility.  Gender was not a factor for African Americans.

The most significant factors?

For women, divorce is the most detrimental economic event that could cause you to move down a class;  if you’re a man, stay away from drugs … heroin use was the single biggest factor that moved men down to the lower class.

How Will Your Children be Affected?

Children in poverty tend to stay in poverty as adults.  The cliché, “money doesn’t buy happiness” may be true, but reality is this: middle class households have more opportunities to prosper than do lower class families who have difficulty, beginning with baby costs,  paying for activities which could help their children toward upward mobility.

Whereas some factors which create downward mobility from the middle class are out of your control, this study does give credibility to what most of us already know: life choices can have a profound effect not only on you but also on your children.

According to the study, the best things you can do for the future of your children are 1) get an education and 2) maintain a stable marriage.

Readers: Just digging a bit here … the results of this study seem rational, yet somewhat sterile.  What do YOU think are the most important things you can do to help your children toward a stable financial future?


{ 6 comments… read them below or add one }

20's Finances September 14, 2011 at 9:21 am

I can’t believe some of these statistics. I didn’t know people moved downward so easily, but with divorce it is easier to grasp. This is definitely something to consider, but not obsess about. My motto is to find something that makes you happy. 🙂


joeplemon September 14, 2011 at 3:47 pm

Even though I am a bit of a numbers nerd, I too am suspicious about studies with lots of statistics. Sometimes the stats can be true, but not all that relevant. For example, staying married is logical, but teaching children how to work and how to manage money seem more practical than simply staying married. I am sure that many divorced parents are able to teach their children those same values.


krantcents September 14, 2011 at 7:55 pm

My children are successful adults. Will they live better? They already earn more than I did at their age. I realize things have changed, but they are on the right track to d very well.


joeplemon September 15, 2011 at 7:29 am

You must be very proud! Congratulations.


steve September 20, 2011 at 7:48 pm

I am agree with you. basically i am middle class economic class. it is a high cost to maintain my children education and other cost. I try to help my children financial cost. they are trying to go a better position. so when they will reach their target, financial problem will be quite.


Invest It Wisely October 3, 2011 at 8:56 pm

I sure hope my children live better than I do. I also hope that I’m aroudn to enjoy it as well. I grew up in the lower middle class and ended up in the upper lower class around my teens, but I dug my way out and now I would say I am solidly in the middle class. I hope my children can continue that upwards trajectory, but of course it’s not all about wealth and I will support them in whatever they do so long as they live well and are happy.


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