Maryland's economic mobility is among the best in U.S.

If you're aiming to be upwardly mobile, living in Maryland might help.

The state is one of the best in the country for moving on up, what the study calls positive economic mobility, a new study by the Pew Charitable Trusts concludes. States doing better than average are largely in the Mid-Atlantic and Northeast, while those doing worse are in the South, according to the report, released Wednesday.

Researchers at Pew's ongoing Economic Mobility Project say they're trying to answer a big question: Is the American dream alive and well? The report, which they say is the first to look at economic mobility by state, raises troubling questions.

"It shows that there is not equality of opportunity across the states," said Diana Elliott, the project's research manager.

"Where you live matters," added Erin Currier, the project manager.

The center tracked about 65,000 workers — all born between 1943 and 1958 — on three measures: their earnings and whether those earnings went up or down relative to others in the period between their mid 30s and late 40s.

The Maryland residents saw a 21 percent average gain in earnings over that period, compared with 17 percent nationwide, Pew found. That was after accounting for the sapping effect of inflation.

More Marylanders in the bottom half for earnings saw their incomes rise relative to others, 42 percent vs. 34 percent nationwide. And fewer Marylanders in the top half saw a downward slide on the earnings ladder than people nationwide, 22 percent vs. 28 percent.

Just two other states beat the national average on all three measures, Pew said — New Jersey and New York. Connecticut, Massachusetts, Pennsylvania, Michigan and Utah topped the national average on two measures.

Louisiana, Oklahoma and South Carolina had worse upward mobility than the nation on all three measures, with six other states in the South falling behind on two.

Pew's researchers said it was beyond the scope of the study to explain why certain states did well and others didn't, but they noted that education beyond high school, savings, assets and neighborhood poverty during a worker's childhood can all affect economic mobility, up or down.

Several economists thought education was key: The top states have some of the largest shares of residents with advanced degrees.

Also, many jobs added to the state in the past generation, particularly in the Baltimore-Washington corridor, are in higher-wage professional and business services fields, said Stephen Fuller, director of George Mason University's Center for Regional Analysis. He and Daraius Irani, director of Towson University's Regional Economic Studies Institute, pointed to employment trends as a reason Marylanders might have better economic mobility.

"You're not seeing a lot of IT firms, say, in the South," Irani said.

Federal spending has played a role. Per capita, Maryland is one of the biggest beneficiaries of money flowing to federal contractors of all sorts. However, economists warn that the state is likely to feel an outsized hit when looming budget cuts arrive — a downward mobility risk for local workers.

"Since we are so entrenched with the federal government, this could have a disproportionate effect on our economy, with the caveat that perhaps the cuts won't be so severe in the cybersecurity arena," Irani said.

The Pew report, at economicmobility.org, followed residents now in their 50s and 60s — largely baby boomers — but looked at their earnings history from their prime working years. The most recent data was from 2007, just before the recession.

Workers who moved to a different state were more upwardly mobile than those who didn't, Pew found. But movers didn't drive the overall results. That's because most Americans don't leave their home state, Pew said.



Upward, downward mobility

•Pew's Economic Mobility Project found that three states did consistently better than the national average on economic mobility measures and three states did consistently worse.

•Pew looked at residents' earnings growth, the share of residents in the bottom half of the earnings ladder making significant gains (upward mobility) and the share of residents in the top half losing significant ground (downward mobility) for a large group of workers in their 30s and again in their 40s.

•States with higher earnings gains, higher upward mobility and lower downward mobility:

Maryland, New Jersey and New York

•States with lower income gains, lower upward mobility and higher downward mobility:

Louisiana, Oklahoma and South Carolina

Source: Economic Mobility Project