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Neighborhoods Impact A Child’s Future Income

Posted By Prucia Buscell, Tuesday, May 19, 2015

Surprising New Discoveries in Research Revisited   

New research shows that where we grow up influences the rest of our lives, and that wealth isn’t the whole story. The findings suggest place plays a big part in which poor kids escape poverty as adults, and that a childhood move to a better neighborhood can change a life trajectory.

After the Los Angeles riots 20 years ago, Congress created an antipoverty initiative called Moving to Opportunity, which provided vouchers to help poor families move to better neighborhoods.  The vouchers were randomly assigned so that researchers could study the neighborhood effect. Initially, little economic difference was found. Though some health benefits were identified, the program was considered a failure.

In a new study on upward mobility across America, researchers examined earnings records of millions of families who moved with children.  The mass of data they gathered showed poor kids who grew up in some cities and towns had a much better chance of escaping poverty as adults than similar poor kids who grew up elsewhere.  The researchers, Harvard economist Raj Chetty and Nathaniel Hendren, found that among those who had moved, every year of childhood spent in a better neighborhood contributed to measurably improved economic outcomes as adults. For kids whose families relocated to worse neighborhoods, adult economic outcomes changed by the same degree but for the worse. The research is described in a New York Times story by David Leonhardt, Amada Cox, and Claire Cain Miller.    

“The data show we can do something about upward mobility,” Chetty told The Times. “Every extra year of childhood spent in a better neighborhood seems to matter.” Because each year had an impact, the research showed a teenagers’s year in a better neighborhood mattered as much as a younger child’s year. Chetty and Hendren reexamined Moving to Opportunity, and with longer-term and more recent data, found that those children too benefited financially as adults.

Places most conducive to upward mobility shared several traits: good elementary schools, stable families, high levels of civic involvement, less income inequality, and more residential integration of affluent, middle income and low income families.  Future prospects for low income children varied significantly depending on location. . For instance, data showed the probability of a child reaching the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4 percent in Charlotte but 12.9 percent in San Jose.  

Areas that fostered measurable upward mobility for poor kids included large cities—San Francisco,  San Diego, Salt Lake City, and Providence, R.I., and suburban counties such as Fairfax, VA, Bergen, NJ,  Bucks, PA, and Macomb, MI.

Researchers found low income children from Baltimore faced the worst odds of escaping poverty. Boys who grew up poor in Baltimore earned 25 percent less as adults than similar low-income boys who were born there and moved away as children. Other places where poor kids faced daunting odds included areas of some of the nation’s biggest cities, including Atlanta, Chicago, Los Angeles, Milwaukee, The Bronx and parts of Manhattan. The Times published charts showing how childhood location influenced adult income.  See The Times interactive map on the best and worst places for upward mobility.   The researchers’ Equality of Opportunity Project has a wealth of information, including a listing of the future income impact for poor kids in the country’s 100 largest counties. 

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