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

Recent research documents widening class gaps in intergenerational income mobility in the United States. 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 this growing class divide in mobility. To do so, it combines newly published estimates of local wealth inequality from 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 children from low-income families, but no comparable association for their high-income peers. These associations are robust to economic and demographic changes, including, critically, changes in income inequality. A decomposition exercise suggests that rising local wealth inequality accounts for roughly one-fifth of the observed increase in class gaps in mobility. Together, the findings identify local wealth inequality as a central dimension of stratification shaping children’s economic opportunities above and beyond income inequality.