Eliminating Poverty and Maximizing Happiness

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Eliminating Poverty and Maximizing Happiness

Since at least the 1960s, economists and policymakers have been asking, “What can be done to eliminate poverty in the world’s richest country?”  Ironically, after falling somewhat in the ‘60s, poverty rates have proven essentially intractable since about 1970, despite roughly $24 trillion in cumulative government spending.

Ten years ago, scholars Ron Haskins and Isabel Sawhill of the Brookings Institution observed that young men and women who adhere to three “middle-class norms” are far more likely to be at least in the middle class.  Those three norms, which they called the “success sequence,” run as follows:

  • Graduate from high school;
  • Maintain a full-time job or have a partner who does so; and
  • Have children while married, should they choose to become parents.

More importantly, this behavior is not merely descriptive of success, it’s also predictive and prescriptive. Haskins and Sawhill argued that adults who follow these norms in sequence—that is, get an education, get a job, and get married before having children, in that order—will maximize their odds of realizing the American Dream.  In fact, using cross-sectional data, based on all adults, they observed that 98% of adults who followed the success sequence avoided poverty.

For Boomers and Xers the evidence was overwhelming.  But since each generation of Americans faces unique opportunities and challenges when they reach adulthood, the question was, “How well does the success sequence relate to the economic outcomes of Millennials, today?” 

Panel data that tracks Millennials from when they were 12-to-16 years old enabled Wendy Wang and W. Bradford Wilcox to test the relevance of the success sequence among the first group of Millennials who reached adulthood.  Since a higher share of Millennials are delaying marriage and parenthood versus earlier generations, they categorized unmarried, childless young adults as “on track,” as long as they had graduated from high school and had a full-time job.

Their analysis found that following the success sequence is still strongly linked to settling into the middle class or higher.  More than 89% of Millennials who have followed all three success sequence steps are in the middle-or-top third of the income distribution by ages 28 to 34.  Similarly, 81% of Millennials who have followed the education and work steps but are not married and haven’t had children yet are in the middle-or-higher income brackets.  In contrast, only 29% of young adults who missed all three steps manage to be in the middle-or-upper income groups...

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