Millennials owe a record amount of debt, and it could become a huge drag on the economy

Student debt protest Occupy

Occupy Wall Street demonstrators protest against the rising national student debt in New York City. REUTERS/Andrew Burton

US consumer debt is approaching a record 20% of GDP, and millennials owe most of it.

Millennials — 21 to 34-year-olds — hold an estimated $1.1 trillion of the country’s $3.6 trillion in consumer debt, according to UBS, as rising student and auto loans outweigh a drop in mortgages.And all that rising debt is coming with rising default risks. A UBS evidence lab survey found that 52% of people worried about defaulting on any loan over the next 12 months were in the […]

Where the American Dream Lives and Dies


An intersection in Otero County, Colorado. Rags-to-riches stories , like Benjamin Franklin’s , have always captured the American imagination. They feed the narrative of the American Dream—that from humble beginnings, a scrappy, hardworking person can become prosperous, and afford opportunities his or her parents did not have. Through booms and recessions, people have bought into this myth .

The problem is: The American Dream lives and dies at the local level. Stanford* economist Raj Chetty has shown that conditions in our neighborhoods are really what shape our ability to escape poverty and determine if we will fare better than our […]

The fading American dream: Economic mobility has nearly halved since 1940

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IMAGE: An infographic conveying results by Chetty et al ., which reveal that the probability for children to attain a higher income than their parents has dropped dramatically — from more than… view more Credit: Carla Schaffer / AAAS The probability for children to attain a higher income than their parents has dropped dramatically – from more than 90% for children born in 1940 to 50% for children born in the 1980s – according to a new study analyzing U.S. data. Results reveal that restoring economic mobility would require, in part, more equal economic redistribution. The "American Dream" promises […]

The End of Upward Mobility in America. Blame Concentrated Wealth.


By Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang

One of the defining features of the “American Dream” is the ideal that children have a higher standard of living than their parents. We assess whether the U.S. is living up to this ideal by estimating rates of “absolute income mobility” – the fraction of children who earn more than their parents – since 1940.

We measure absolute mobility by comparing children’s household incomes at age 30 (adjusted for inflation using the Consumer Price Index) with their parents’ household incomes at age 30. We find that […]

Peter Temin: Economic Mobility Requires the Nearly Impossible |TTI


A lot of factors have contributed to American inequality: slavery, economic policy, technological change, the power of lobbying, globalization, and so on. In their wake, what’s left?

That’s the question at the heart of a new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy , by Peter Temin, an economist from MIT. Temin argues that, following decades of growing inequality, America is now left with what is more or less a two-class system: One small, predominantly white upper class that wields a disproportionate share of money, power, and political influence and a much larger, minority-heavy (but […]

The long-run tendency for wealth to concentrate in a few hands

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The long-run tendency for wealth to concentrate in a few hands

In the past 700 years inequality only declined significantly after the Black Death and the two world wars, writes Guido Alfani

In recent years, long-term trends in economic inequality have attracted growing attention from social scientists, which also reflects civil society’s increasing awareness of the deepening economic disparities. In this context, particular attention has been paid to the share of the total income or wealth earned/owned by the top of the distribution – usually the top 1%, 5% or 10% among […]

Escaping Poverty Requires Almost 20 Years With Nearly Nothing Going Wrong

A man cleans up confetti while surrounded by tourists in Times Square in New York.

A lot of factors have contributed to American inequality: slavery, economic policy, technological change, the power of lobbying, globalization, and so on. In their wake, what’s left?

That’s the question at the heart of a new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy , by Peter Temin, an economist from MIT. Temin argues that, following decades of growing inequality, America is now left with what is more or less a two-class system: One small, predominantly white upper class that wields a disproportionate share of money, power, and political influence and a much larger, minority-heavy (but […]

Escaping Poverty Requires Almost 20 Years With Nearly Nothing Going Wrong

A man cleans up confetti while surrounded by tourists in Times Square in New York.

Keith Bedford / Reuters A lot of factors have contributed to American inequality: slavery, economic policy, technological change, the power of lobbying, globalization, and so on. In their wake, what’s left?

That’s the question at the heart of a new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy , by Peter Temin, an economist from MIT. Temin argues that, following decades of growing inequality, America is now left with what is more or less a two-class system: One small, predominantly white upper class that wields a disproportionate share of money, power, and political influence and a […]

The shocking decline in American economic mobility

Flying under the radar is a recent study from Stanford University economist Raj Chetty and colleagues showing that the economic mobility in the United States has been nearly cut in half since 1940.

Using a sophisticated set of data from the Census Bureau and tax records, the researchers found that the probability of children reaching a higher living standard than their parents was only 50 percent for those born in the 1980s, compared with 92 percent for those born in 1940. The data were adjusted for inflation and other variables.

To be sure, growth in gross domestic product had slowed by […]

Selective colleges are less likely to enroll high levels of low-income students


It’s college admissions season, which means our yearly obsession with the nation’s most selective schools has reached its peak. But new research reminds us that those schools aren’t the engines of economic mobility we typically expect from our nation’s colleges.

Just 16% of the enrolled students at America’s most competitive colleges receive a Pell grant, the money the government provides to low-income students for higher education, according to a study released early Tuesday by the Pell Institute for the Study of Opportunity in Higher Education. The share of low-income students goes up as colleges get less selective, the study found […]