By James Pethokoukis
One of the key findings of the remarkable little book Streets of Gold: America’s Untold Story of Immigrant Success—published last month—by economists Ran Abramitzky (Stanford University) and Leah Boustan (Princeton University) is that “background is not destiny.” The researchers find that “children of immigrants from nearly every country in the world are more upwardly mobile than the children of US-born residents who were raised in families with a similar income level.”
This is true even with kids whose parents come from quite poor nations, including Central American countries such as Guatemala, El Salvador, and Nicaragua, Nigeria in Africa, and Laos in Asia. “The children of immigrants do typically make it in America. And it most often takes them only one generation to rise up from poverty,” Abramitzky and Boustan conclude. A great chart here:
An obvious question: Why do these kids do so well? Is it that immigrants and their kids have a special drive and gumption? Do immigrant parents hand down a superior work ethic to their kids? Well, such special attributes could be part of the story. But one thing that jumps from the data is also something that native-born Americans should pay close attention to.
Abramitzky and Boustan find that “geography matters—a lot. . . . [I]mmigrants tend to move to locations in the United States that offer the best opportunities for upward mobility for their kids, whereas the US born are more rooted in place.”
It’s long been known that certain regions and cities are more associated with higher upward mobility, such as the Bay Area and Boston. And some aren’t, such as the “left behind” areas of the Rust Belt. But the new finding by the researchers is that immigrant parents are more likely to settle in high-opportunity areas than US-born parents. From Streets of Gold (bold by me):
As striking proof that geography matters, we find that children of immigrants outearn other children in a broad national comparison, but they do not earn more than other children who grew up in the same area. In terms of economic fortunes, the grown children of immigrants look similar to the children of US-born parents who were raised down the block or in the same town. This pattern implies that the primary difference between immigrant families and the families of the US born is in where they choose to live. One implication of our findings is that it is very likely that US-born families would have achieved the same success had they moved to such high-opportunity places themselves. In fact, we find that the children of US-born parents who moved from one state to another have higher upward mobility than those who stayed put: their level of upward mobility is closer to (but not quite as high as) that of the children of immigrants who moved from abroad.
Are there policy implications to this finding? I mean, kind of! America’s high-opportunity (and high-productivity) cities are also the ones with high housing costs. And while immigrants are more willing to live in these places, policymakers need to make it easier for all strivers in this great land to live in such places.
In the 2019 analysis “Removing Barriers to Accessing High-Productivity Places,” economist Daniel Shoag of the Harvard Kennedy School and Case Western Reserve University notes that the historical “tendency for Americans to move has changed in recent decades, as changes in legal land-use restrictions have limited housing construction in America’s richest locations. These restrictions have created limits on housing supply and have led to rapidly rising prices that make high-wage places unaffordable to less-educated workers.”
Among Shoag’s ideas for reform:
For more on Streets of Gold, let me recommend this video of a recent AEI-hosted event with co-author Leah Boustan. Great stuff. In addition, my recent Substack newsletter, Faster, Please!, features an essay on the book and a Q&A with Boustan. Check it out!
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