July 31 2013
Vicki E. Alger
Recent findings from Harvard University’s Equality of Opportunity Project may surprise folks who believe that redistributing wealth is the way to lift people out of poverty.
The Harvard researchers wanted to see whether differences in tax expenditures across the U.S. correlate with the economic outcomes of low-income children. As The New York Times reported:
The team of researchers initially analyzed an enormous database of earnings records to study tax policy, hypothesizing that different local and state tax breaks might affect intergenerational mobility.
What they found surprised them. …The researchers concluded that larger tax credits for the poor and higher taxes on the affluent seemed to improve income mobility only slightly. The economists also found only modest or no correlation between mobility and the number of local colleges and their tuition rates or between mobility and the amount of extreme wealth in a region.
So what does correlate with upward mobility? The Times continues:
All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods. Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups.
So it would seem that liberty and personal responsibility work better than centralized planning when it comes to laying the foundation for economic success.