This article sparked some great discussion. A lot of the discussion has been based on personal experience and intuition.
The idea that wealth gives tremendous advantage conforms to my personal experience and intuition. But personal experience and intuition have often led me astray. When I read an article like this, based on a study, I hope to encounter some evidence for or against my beliefs. An important tenet of rationality is to seek evidence that contradicts one's ideas, rather than confirming them.
This article is fairly sloppy. Start with the headline:
Poor kids who do everything right don’t do better than rich kids who do everything wrong
This statement, though a bit fuzzy, is directly contradicted in the article:
Even poor kids who do everything right don't do much better than rich kids who do everything wrong.
Authors do not write titles, we understand, but the article is hardly better. The chart is the most confusing thing I have seen in some time.
This appears to show where certain people ended up at age 40 after starting in certain categories. It's a "before and after" picture, but we don't see the before.
If we assume that "poor" people are evenly split between the bottom two quintiles, then the before and after chart for them might look like this:
There's clearly significant improvement in their situation. 20% are in the top 20%, suggesting that college was just enough to offset youthful poverty. And this group is now underrepresented in the bottom two quintiles relative to the general population.
Similarly, supposing that the "rich" belong to the top two quintiles, here's their chart:
Dropping out of high school was disastrous. Only 19% are still in the top two brackets, what we called "rich." More than half are now in the "poor" brackets.
I have removed the glaring arrows. The diagonal one makes a strange point:
"Specifically, rich high school dropouts remain in the top about as much as poor college grads stay stuck in the bottom — 14 versus 16 percent, respectively."
I think we are supposed to notice that 14 and 16 are similar in value, but I don't understand why that is significant. The lesson I take is that youthful wealth or poverty remains unchanged when those kids grow up only about 15% of the time, everybody else moves to a different bracket, largely correlated with education.
The paper cited in the article has a lot of the usual tedious academic dithering over definitions, but also some good data. Figure 4 depicts how sons of fathers who earn in the bottom 10% fare when they grow up, how many of them land in each of ten income brackets.
Before looking at it, ask yourself what you expect to see. Ask yourself what you would like to see. Keep in mind that the "before" chart would show 100% of fathers in the leftmost column.