Income Level Differences In Achieving the American Dream

dwheufds6kq-joshua-earleIt is more important to grow your income than cut your expenses.  It is more important to grow your spirit than cut your dreams.

Quote attributed to: Robert Kiyosaki

An Analysis of American Dream Composite Index Data (calendar 2013 – 2015)

The American Dream Composite Index (ADCI) study is “a unique and robust measure of American sentiment”. The study is conducted monthly by Xavier University. It looks at behaviors, attitudes and satisfaction with dimensions such as economic conditions, personal well-being, societal and political institutions, cultural diversity and the physical environment. The study is conducted monthly and results are reported by Xavier University on their website.

Xavier University provides The Burghard Group with aggregated data to use in helping economic development professionals and elected officials better understand how people living in their communities feel about their ability to achieve the American Dream. For the purpose of this analysis, aggregate data for the three-year period of calendar 2013 to 2015 has been used.

Executive Summary

The data suggest income is correlated to achieving your American Dream.  But, the correlation curve appears to be discontinuous.  Hitting the $40,000 clearly makes a big difference, and then hitting the $60,000 earnings level also seems to make an impact.  However, there appears to be minimal impact on achieving your American Dream between earning $60,000 and $100,000.   It isn’t until your earnings get over $100,000 do you see another meaningful impact.  My hypothesis is these trigger levels likely represent breakpoints where people’s lives are able to change noticeably (e.g. able to pay off debt or buy a home).

It is important to point out that on a national basis residents averagely report realizing only 64.6% of their American Dream. In my opinion, this is far from the best we can do. In order for residents to achieve the remaining 35.4%, it is imperative economic development professionals and elected officials understand specific local barriers and develop strategies around infrastructure investment, public policies/programs and asset creation to knock those barriers down.


The ADCI is comprised of 35 dimensions. These dimensions are statistically grouped into 5 indexes and a total composite score:

Economic – Measures one’s satisfaction with respect to their finances, job, home ownership and healthcare

Well-Being – Measures the extent of one’s contentment, health and prosperity in life.

Societal – Measures the extent to which the government, businesses, and people are fair and trustworthy.

Diversity – Measures the attitudes toward the assimilation in one’s community.

Environment – Measures the extent of pollution in the air, food, water and land that one encounters on a regular basis.

Index Versus National Average By Income Level

$100,000 +108.97103.65103.96102.2299.50104.88
$80,000 - $99,999104.38101.40102.96100.37100.04102.35
$60,000 - $79,999104.31101.88102.25100.5099.10102.36
$40,000 - $59,999100.49100.29100.3899.93100.67100.33
$20,000 - $39,99996.7798.8797.8999.63100.7898.26
This index is calculated based on data over the three year period of calendar 2013-2015


The Xavier University research gives insight into resident sentiment about the American Dream, but we have to look elsewhere to try and understand why residents feel as they do.

As you’d expect, the biggest observable difference was in the Economic index. Residents with a graduate degree scored 4 points above national average while high school drop outs scored 9 points under. This is highly consistent with data from the Bureau of Labor Statistics that correlates an increase in earnings based on the level of educational attainment.

This translated into observable differences in the Well-Being index, presumably because a higher income helps relieve the stress associated with worrying about rising health care costs and allows people to save a bit for unforeseen challenges. I did find a paper entitled “Education and Subjective Well-Being: A Meta-Analysis” published by the American educational Research Association. The analysis conclusion is that “education is significantly positively related to adult subjective well-being”.

The gap on the other indexes was less remarkable across the different levels of educational attainment. The only consistent exception is high school dropouts. They scored dramatically lower on every index reinforcing the point that getting a high school diploma should be considered mandatory for achieving the American Dream.

You may also be interested in these posts:

Generational Differences in Achieving The American Dream

Racial Differences in Achieving The American Dream

Employment Differences in Achieving The American Dream

Relationship Differences in Achieving The American Dream

Impact Of Home Ownership In Achieving The American Dream

Educational Differences In Achieving The American Dream


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