Economic Risk Assessment With FRB Mobility Data

The St. Louis Fed published a new study on Economic Mobility in the US. The study leads to a simple statistic: “the probability that a child born to parents in the bottom fifth of the income distribution makes the leap all the way to the top fifth of the income distribution”

Children born to parents in the bottom fifth of the income distribution chance of reaching the top fifth:

  • 7.5% USA
  • 9.0% UK
  • 11.7% Denmark
  • 13.5% Canada

There is a high degree of variation between regions in the US. The most optimistic and pessimistic numbers are:

  • 16.8% Top decile USA
  • 4.8% Bottom decile USA

People growing up in San Jose, California are three times as likely to move up the income ladder compared to Charlotte, Atlanta, Indianapolis.

Upward mobility national
Source: St. Louis Fed


The high degree of variation is not only regional. It is visible at the county level.

Average upward mobility rate:

  • 11% DC Metro Average
  • 3.5% Baltimore
  • 4.7% DC
  • 9.2% Prince Georges County
  • 14.2% Charles County
Upward mobility DC Metro
Source: St. Louis Fed

Factors affecting mobility during childhood in the more mobile areas include:

  • moving to low poverty census tracts improves long-term success
  • moving to a mobile area increases earnings in adulthood by 30%
  • higher likelihood of attending college
  • lower instances of teen pregnancy

General factors contributing to upward mobility:

  • mixed income communities produce a better outcome for kids from disadvantaged backgrounds
  • areas with less income inequality have higher rates of upward mobility
  • areas with fewer single parents have substantially higher rates of upward mobility
  • areas that are more socially cohesive have higher rates of social mobility

Risk assessments are important for international and local ventures. Finding a high-performing economy and a suitable workforce lowers the risk of failure. This information from the St. Louis Fed is an essential source for performing a risk assessment for US domestic businesses and for foreign businesses seeking to enter the US market.

Oklahoma has same earthquake risk as California

The United States Geological Survey (USGS) forecast for 2017 says Oklahoma will face earthquake damage risk equal to California. The report is close to last year’s forecast which indicates a trend that is changing the region. The 2017 hazard model is the same as the 2016 report but includes an updated earthquake catalog. The 2016 forecast indicated a high hazard (greater than 1%) for Oklahoma-Kansas, the Raton basin (Colorado/New Mexico border) north Texas, north Arkansas, and the New Madrid seismic zone.

Experts believe hydraulic fracturing or fracking is responsible. Fracking involves injecting water and other chemicals at high pressure into the Earth to extract hydrocarbon resources.

The changes in the area are a reminder to risk managers that tornado is not the only major hazard. A Business Impact Analysis (BIA) is the first step in developing a complete Business Continuity Plan (BCP) that will prepare your small business for natural and manmade disasters. Our services team can provide BCP training and implementation to your company. Contact us today for a consultation.


Map showing chance of damage from an earthquake in the Central and Eastern United States during 2016. Percent chances are represented as follows: pale yellow, less than 1 percent; dark yellow, 1 to 2 percent; orange, 2 to 5 percent; red, 5 to 10 percent; dark red, 10 to 12 percent. Source: USGS