American Dream collapsing for young adults, study says

RISING income inequality has eroded the ability for American children to grow up to earn more than their parents, according to groundbreaking new research from a superstar team of economists that carries deep implications for President-elect Donald Trump's policy agenda.

The research from a team of economists led by Stanford's Raj Chetty, and also including researchers from Harvard and the University of California at Berkeley, estimates that only half the children born in the 1980s grew up to earn more than their parents did, after adjusting for inflation. That's a drop from 92 per cent of children born in 1940.

The fall-off is particularly steep among children born in the middle class."If we simply care about absolute mobility," Prof Chetty said, "these results show, you have to care about inequality."