Cohort-Specific Experiences of Industrial Decline and Intergenerational Income Mobility

Abstract

The United States manufacturing industry has long been regarded as the economic engine that built and sustained the middle class. In recent decades, this pillar of economic opportunity has eroded substantially. Though much has been written about the decline of manufacturing sectors in United States communities, the potential consequences for economic mobility, and stratification processes more generally, remain largely unexplored. In this study, I develop a conceptual framework linking the study of labor market change to economic stratification. I examine how structural changes to United States labor markets have altered opportunities for economic advancement in the United States. I focus the analysis on birth cohorts in the 1980s, whose labor market entry spans the large-scale erosion of the manufacturing industry in the 2000s. I find strong evidence that declines in manufacturing employment have contributed to growing geographic disparities in upward intergenerational income mobility. Children raised in counties that experienced large contractions in manufacturing industries throughout adolescence experienced large economic penalties in adulthood via reduced levels of upward mobility. The results demonstrate how long-term macroeconomic changes can disrupt and redistribute opportunities within societies.