This report investigates intergenerational economic mobility in New Orleans using data from Opportunity Insights, focusing on two cohorts: children born between 1978 and 1982, and those born in 1992. The analysis highlights how structural disparities—particularly those tied to race, geography, and public investment—have influenced economic outcomes over time, with Hurricane Katrina serving as a pivotal disruption.
New Orleans, a city with a Black-majority population and deep racial and economic divides, faces heightened vulnerability to climate-related shocks and systemic disinvestment. These overlapping challenges—such as entrenched neighborhood segregation, high income inequality, and historical exclusion—make it a critical case study for understanding how location affects economic advancement.
The findings show that New Orleans ranks at the bottom among the 50 largest U.S. commuting zones in terms of upward mobility for children from low-income families. On average, individuals raised in the city are projected to earn 13.4% less than the national average in adulthood, with approximately 40% of their income determined by their parents’ earnings. This indicates a strong intergenerational transmission of economic status.
Patterns vary across parishes. St. Charles and St. Tammany parishes exhibit higher absolute mobility for youth from disadvantaged backgrounds, though relative mobility remains limited, reflecting persistent class-based disadvantages. Orleans Parish has seen some improvements for its poorest residents but still ranks poorly nationally on both relative and absolute mobility. St. Bernard and Plaquemines parishes show relatively stronger mobility outcomes overall, while St. James and Jefferson parishes have seen disproportionate gains among high-income groups.
The report concludes with policy recommendations centered on evidence-based strategies proven to support upward mobility.
Economic mobility is shaped by multiple factors, including education, healthcare access, social networks, safety nets, crime rates, and private investment. Regions with higher mobility tend to be more resilient to economic and environmental shocks. This is especially relevant for New Orleans, which contends with widespread poverty, inequality, and climate vulnerability. Residents with greater financial stability are better equipped to withstand job loss or disasters, while increased business activity improves access to credit and insurance, accelerating recovery.
Persistent spatial and racial inequities contribute to low upward mobility in the city. Targeted investments aimed at improving economic prospects for low- and middle-income residents could help close generational gaps and enhance resilience to climate threats. Such efforts are not only matters of equity but also essential for long-term regional stability. Resilient communities are more likely to engage in civic improvement, with individuals who experience upward mobility often advocating for better infrastructure, zoning, and emergency preparedness. Research indicates that Black residents returned to New Orleans more slowly after Katrina, a trend linked to mobility constraints and unequal recovery capacity. Thus, individual economic progress contributes to collective resilience. In a city facing systemic barriers and recurring climate risks, advancing mobility serves as a form of long-term disaster preparedness.
Data from Opportunity Insights reveal that New Orleans performs among the worst in the U.S. for upward income mobility: only 5.1% of children born into low-income families reach the top income quintile as adults. Relative mobility is also low—40% of a child’s income is predicted by parental income, and those raised in the city earn 13.4% less than peers nationwide, even after adjusting for family income. This underscores the negative impact of place on long-term earnings for disadvantaged youth. Mobility outcomes differ significantly across parishes, with St. Bernard and St. Tammany showing broad post-Katrina improvements, while areas like St. Charles have experienced rising inequality. Racial and class-based income gaps remain entrenched.
The analysis draws on Opportunity Insights data, which links restricted IRS tax records with Census data to assess intergenerational mobility across two birth cohorts. The first cohort includes individuals born between 1978 and 1982, with income measured in 2005; the second consists of those born in 1992, with income observed in 2019. Both groups were assessed at ages 27–28, the earliest age for reliable income estimates.
Intergenerational mobility is defined as the correlation between parents’ and children’s positions in the national income distribution, based on where children grew up. A stronger correlation indicates lower mobility and greater persistence of economic status across generations. Research confirms that a child’s environment has a causal effect on future earnings. The dataset allows for subgroup and neighborhood-level analysis of adult well-being.
The selection of these cohorts enables a quasi-experimental approach to studying how exposure to an external shock—Hurricane Katrina—affected long-term economic outcomes. The older cohort was largely past key developmental stages when the storm hit, meaning their trajectories were shaped by pre-Katrina conditions. In contrast, the 1992 cohort was around 13 years old in 2005, placing them in a critical pre-adult phase. Their experiences—such as disrupted education, relocation, and reintegration into altered neighborhoods—shaped their adult earnings and reflect how local systems supported (or failed) equitable opportunity after the disaster. While the older group provides a baseline of pre-Katrina conditions, the younger cohort better captures the long-term effects of recovery policies on housing, schooling, and neighborhood change.
Although the Opportunity Insights dataset does not perfectly align with Katrina’s timing, it is the only publicly available resource for analyzing local intergenerational mobility in New Orleans. This study uses descriptive statistics, parish-level breakdowns, and cohort comparisons to identify mobility patterns across race, income, and geography, treating Katrina as a natural experiment to examine how climate disasters affect structural inequality.
The analysis focuses on the New Orleans metropolitan area, defined by eight parishes: Plaquemines, St. Bernard, Orleans, Jefferson, St. Charles, St. John the Baptist, St. James, and St. Tammany. The following sections present key findings on mobility across these areas, emphasizing differences between cohorts and place-based disparities.
To assess mobility, two primary metrics are used: absolute and relative. Absolute mobility evaluates whether children earn more than their parents, adjusted for inflation. High levels suggest broad economic growth, even if inequality persists. Relative mobility measures how closely a child’s economic position is tied to their parents’. High relative mobility indicates fluid movement across income levels, while low levels suggest that background heavily influences outcomes.
Nationally, absolute mobility declined from about 90% for those born in the 1940s to 50% for 1980s births. Relative mobility has remained stable nationally from 1971 to 1993 but varies widely by region. In New Orleans, both metrics are poor. Only 5.1% of children from low-income families reach the top quintile—a measure of low relative mobility. Additionally, children raised in the city earn 13.4% less than the national average, indicating low absolute mobility. This dual shortfall means disadvantaged youth not only struggle to climb the income ladder but also earn less overall than they would elsewhere. These findings underscore the need for targeted, place-based interventions such as baby bonds, which have shown promise in boosting mobility for the most vulnerable families. In a city with concentrated wealth, climate risks, and deep inequities, such policies offer a viable path forward.
New Orleans has a relative mobility score of 0.397, meaning about 40% of a child’s economic outcome is linked to parental income—a stronger correlation than in most U.S. cities. This reflects limited movement across income levels: children from poor families rarely rise, while those from affluent households tend to stay at the top. The city exhibits pronounced intergenerational income persistence, reinforcing inequality over time.
Parish rankings based on this metric reveal significant variation:
Orleans Parish ranks fourth-worst nationally for upward mobility, performing worse than 96% of U.S. counties. Black boys from low-income families face particularly bleak prospects. As of 2023, 67% of the parish’s population identifies as Black.
Jefferson Parish ranks at the 35th percentile nationally, indicating low mobility. While better than Orleans, it still offers limited opportunities for low-income youth.
Plaquemines Parish is at the 49th percentile, representing average mobility. Rural poverty and industrial underinvestment constrain advancement.
St. Charles Parish ranks at the 61st percentile, showing relatively high upward mobility.
St. John the Baptist Parish is at the 25th percentile, among the lowest in the nation. Historical disinvestment, pollution, and poor schools hinder progress, especially for children near petrochemical zones.
St. Tammany Parish ranks at the 45th percentile, indicating average mobility.
St. Bernard Parish is at the 50th percentile, near the national median.
St. James Parish ranks at the 36th percentile, reflecting low upward mobility.
Absolute mobility scores, shown in Table 1, measure the average income rank at age 26–27 for children whose parents were at the 25th percentile nationally. The z-score compares a location to the national average. Negative values indicate below-average outcomes.
New Orleans has a mobility score of 0.35 and a z-score of -1.93—one of the lowest in the country. Children from poor families remain near the income bottom, reflecting enduring structural barriers. With both absolute and relative mobility low, disadvantaged youth earn less and face steep obstacles to advancement, perpetuating cycles of poverty.
St. Bernard, St. John the Baptist, and Jefferson parishes also fall below national norms (z-scores from -0.81 to -1.04), suggesting constrained prospects for low-income children. These areas have low to moderate relative mobility.
St. James, St. Tammany, and Plaquemines perform moderately below average, offering limited escape from poverty. They show below-average relative mobility, meaning gains are modest and upward movement remains difficult.
St. Charles Parish stands out with a mobility score of 0.443 and z-score of -0.22—closest to the national average. This suggests historically favorable conditions for upward mobility among low-income residents. However, this shifted sharply after Katrina.
The hurricane transformed the region’s physical and economic landscape, exacerbating existing inequalities. The data reflect long-standing inequities and highlight the urgency of targeted, localized investment.
Figure 1 compares income at age 27 for the two cohorts—those born in 1978 (age 27 during Katrina) and those born in 1992 (age 13 in 2005). The younger cohort faced disrupted schooling, displacement, and unequal access to recovery resources—factors that shaped long-term earnings differently by class and location.
Nationally, the lowest-income group (Q1) saw a 6.2% income drop, Q2 fell 4.2%, middle-income youth declined 3.1%, high-income youth (Q4) rose 0.3%, and the top group (Q5) gained 5.4%.
In New Orleans, outcomes were more polarized and uneven. Some low-income youth outperformed national trends, while others fared worse.
St. Charles and Jefferson saw sharp declines for low- and middle-income youth, while high-income youth gained. In St. Charles, the lowest quintile dropped 17%, while the highest rose 10%—widening class divides. Notably, St. Charles previously had stronger absolute mobility, but this eroded post-Katrina, especially for the lowest earners.
Orleans Parish saw a 10% gain for the lowest-income youth, exceeding the national average. However, middle- and high-income groups stagnated or declined, indicating uneven recovery. Despite some progress for the poorest, the parish’s low absolute mobility score (0.35) and poor relative mobility suggest limited and unsustainable gains.
St. Bernard and St. Tammany showed broad-based gains—low-income youth rose 4% and 2%, respectively. Their moderate absolute scores and relative mobility near the 50th percentile suggest more inclusive progress.
St. James saw a 19% gain only for the highest-income group, while lower-income youth saw little change—increasing inequality. Its low mobility scores align with income stagnation, indicating opportunity is largely reserved for the already privileged.
The earnings gap between low-income Black individuals and all low-income individuals born in 1992 and raised in New Orleans narrowed by 27% ($1,400) compared to the 1978 cohort. The gap between low-income Black and white individuals decreased by 15%. This marks progress in reducing disparities for Black families despite ongoing structural barriers. Low-income Black children saw a 7% income increase across cohorts, while white incomes remained flat.
Among middle-income groups, the gap between Black individuals and all middle-income individuals narrowed by 20% ($1,100). The Black-white gap shrank by 3%. However, white middle-class households still earned 43% more than Black peers in the 1992 cohort, indicating persistent racial disparities.
For high-income families, Black individuals in the 1992 cohort earned slightly more than in 1978, but the white-Black gap remained unchanged—white households still earned 40% to 45% more.
Among the highest earners, the gap between Black and white individuals increased by 14% compared to the 1978 cohort, reflecting growing racial disparities even at the top.
Overall, Black children in the 1992 cohort achieved gains across all income levels compared to the 1978 cohort. For low-income families, the Black-to-all gap narrowed by 27%; for middle-income, by 20%. However, racial wealth gaps remain large—white peers still earn 40% to 45% more at every parental income level. While progress is evident at the lower end, structural barriers persist even in more affluent Black households.
Wealth inequality is critical to understanding deep, persistent disparities. While income mobility reflects earnings across generations, wealth reflects asset accumulation. Addressing both is essential for equity and resilience.
Data from The Data Center shows stark racial wealth disparities in the metro area. White households make up 54% of homes but hold 83% of total net worth. Black households represent 34% of homes but own only 10% of wealth—highlighting generational differences in asset access and capital.
New Orleans has long faced structural barriers to mobility and racial equity, many intensified after Katrina. Poverty, income gaps, and segregation remain deeply rooted. While various policy initiatives—from affordable housing to workforce programs—have been tried, their scale and coordination have not driven broad improvements in mobility.
The following proposals are not novel but aim to integrate, sustain, and center community-driven strategies to boost regional mobility and growth. A comprehensive policy framework combining targeted investments and structural reforms is needed.
Building generational wealth through municipal baby bonds or child trust accounts can provide seed capital for low-income youth to pursue education, homeownership, or entrepreneurship. Pioneered by economists Darrick Hamilton and William A. Darity, Jr., this approach could significantly reduce the racial wealth gap. In 2021, New Jersey became the first state to enact baby bond legislation, offering $2,000 trust accounts to children in Medicaid-eligible households. Implementing a similar program in New Orleans—where racial wealth disparities are among the nation’s widest—could transform economic prospects for vulnerable populations.
Investing in Black neighborhoods without displacement can be achieved through land banking or community land trusts (CLTs), which stabilize property values and prevent speculative displacement. CLTs have succeeded in cities like Washington, D.C., and Durham, N.C. In New Orleans, small-scale CLTs have merged into initiatives like People’s Housing+, combining three local organizations. Expanding city support through land donations, impact financing, and technical assistance could scale CLTs across all eight parishes.
Expanding employment and business ownership opportunities includes minority entrepreneurship programs that provide capital and technical support. Models like Cincinnati’s Minority Business Accelerator or Atlanta’s Wealth Building Initiative can guide similar efforts in New Orleans. The city could also develop business incubators and co-ownership models for commercial real estate in disinvested areas.
Investing in high-growth, AI-resilient career paths is crucial as automation reshapes labor markets. Programs like Per Scholas have successfully helped people of color transition from low-wage jobs to careers in IT, cybersecurity, and software development. Scaling such initiatives within public works programs could build community resilience in an AI-driven economy.
In conclusion, New Orleans’ economy is deeply stratified, with place, race, and class shaping life outcomes. The city ranks near the bottom nationally: only 5.1% of low-income children reach the top quintile, and their earnings are 13.4% below average. Relative mobility is low, with 40% of adult income tied to parental rank—well above the national norm. Post-Katrina, low-income groups in Orleans Parish improved slightly, but middle- and high-income groups saw little change. In St. Charles and Jefferson, class divides widened. Among top earners, the racial earnings gap grew by 45%.
These patterns cannot be separated from historical policies like redlining, exclusionary zoning, and Jim Crow laws, which concentrated poverty and risk. These legacies increased exposure to economic and climate shocks by placing low-income residents in vulnerable areas with weak infrastructure.
The findings point to a path forward. Policymakers should enhance resilience by reducing risk exposure and investing in climate-adaptive housing—building capacity to withstand both economic and environmental threats. One of the most promising tools to break generational disadvantage is municipal baby bonds. With mobility low and racial wealth gaps growing, such accounts could provide seed capital for education, homeownership, and business creation. In a city marked by asset poverty and systemic exclusion, this policy could transform trajectories—enabling long-term stability, ownership, and opportunity.
— news from Brookings