Rags-to-riches tales aren't that common, new study finds

http://inplainsight.nbcnews.com/_news/2013/11/07/21351793-rags-to-riches-tales-arent-that-common-new-study-finds?lite

Thu Nov 7, 2013
By Allison Linn, CNBC Digital

Want to move up the economic ladder? Go to college, find a spouse who works and try to avoid getting laid off.

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In general, Pew researchers have noted, the rags-to-riches tale so popular in Hollywood is less likely than many Americans would like to believe.

The researchers’ analysis of the Panel Study of Income Dynamics, an in-depth look at family finances from 1968 to 2009, found that just 4 percent of Americans who grew up at the bottom fifth of the household income ladder made it to the top fifth as adults.

Overall, 43 percent of people who are raised in a family at the bottom of the income ladder stay there as adults.

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Elliott also noted that those who moved out of the bottom of the income ladder had more savings, wealth and home equity than those who did not.

Although that shouldn’t be taken to mean that higher wealth drives people up the income ladder, she said it does show that people who have more money are able to do the things that help a person get – and keep – a higher-paying job. That can range from going to college without taking on onerous student loan debt to having enough money to fix your car if it breaks down, allowing you to get to work consistently.

“It underscores that financial security and economic mobility really go hand in hand,” she said of the finding.