Well, it depends on where you live. This paper (pdf) suggests that in the United States, children born into families in the bottom quintile tended to stay put: about 42 percent of bottom-quintile children stayed in the bottom quintile as adults, and another 24 percent moved up to the second-to-lowest quintile. That means that 2/3 of the children born into poor families didn’t quite make it into the middle class or above as adults. And only 6 percent of those born in the bottom quintile wound up in the top quintile as adults.
The surprising thing to me is that, even though “rags to riches” is a dominant American myth, it’s actually closer to reality in other countries. England and South Africa have less income mobility than the U.S., but Germany, Canada, Finland, and Sweden seem to have more. In Finland and Sweden, about 20 percent of the poorest children ended up in the bottom quintile as adults—suggesting that low income doesn’t tend to be much of a disadvantage in those countries.
Now, to be clear, the U.S. data discussed here are for children or young adults born between 1942 and 1972, and tracked through adulthood. Times may have changed—today’s children may find their incomes much more mobile (though to my knowledge there isn’t much evidence to suggest that this is the case).
But at a minimum, the data should give us pause. Perhaps the “rags to riches” story is such an influential archetype not because it’s so common, but because it’s so unusual.