An Atlas of Upward Mobility Shows Paths Out of Poverty
An Atlas of Upward Mobility Shows Paths Out of Poverty
By David Leonhardt
In the wake of the Los Angeles riots more than 20 years ago, Congress created an antipoverty experiment called Moving to Opportunity. It gave vouchers to help poor families move to better neighborhoods and awarded them on a random basis, so researchers could study the effects.
The results were deeply disappointing. Parents who received the vouchers did not seem to earn more in later years than otherwise similar adults, and children did not seem to do better in school. The program’s apparent failure has haunted social scientists and policy makers, making poverty seem all the more intractable.
Now, however, a large new study is about to overturn the findings of Moving to Opportunity. Based on the earnings records of millions of families that moved with children, it finds that poor children who grow up in some cities and towns have sharply better odds of escaping poverty than similar poor children elsewhere.
The feelings heard across Baltimore’s recent protests — of being trapped in poverty — seem to be backed up by the new data. Among the nation’s 100 largest counties, the one where children face the worst odds of escaping poverty is the city of Baltimore, the study found.
The city is especially harsh for boys: Low-income boys who grew up there in recent decades make roughly 25 percent less as adults than similar low-income boys who were born in the city and moved as small children to an average place.
Beyond Baltimore, economists say the study offers perhaps the most detailed portrait yet of upward mobility — and the lack of it. The findings suggest that geography does not merely separate rich from poor but also plays a large role in determining which poor children achieve the so-called American dream.
How neighborhoods affect children “has been a quandary with which social science has been grappling for decades,” said David B. Grusky, director of the Center on Poverty and Inequality at Stanford University, who was not involved in the research. “This delivers the most compelling evidence yet that neighborhoods matter in a really big way.”
Raj Chetty, one of the study’s authors, has presented the findings to members of the Obama administration, as well as to Hillary Rodham Clinton and Jeb Bush, both of whom have signaled that mobility will be central themes of their 2016 presidential campaigns. After more than 15 years of mostly mediocre economic growth and rising income inequality, many families say they are frustrated and anxious about trying to get ahead.
“The data shows we can do something about upward mobility,” said Mr. Chetty, a Harvard professor, who conducted the main study along with Nathaniel Hendren, also a Harvard economist. “Every extra year of childhood spent in a better neighborhood seems to matter.”
The places where poor children face the worst odds include some — but not all — of the nation’s largest urban areas, like Atlanta; Chicago; Los Angeles; Milwaukee; Orlando, West Palm Beach and Tampa in Florida; Austin, Tex.; the Bronx; and the parts of Manhattan with low-income neighborhoods.
All else equal, low-income boys who grow up in such areas earn about 35 percent less on average than otherwise similar low-income children who grow up in the best areas for mobility. For girls, the gap is closer to 25 percent.
Many of these places have large African-American populations, and the findings suggest that race plays an enormous but complex role in upward mobility. The nation’s legacy of racial inequality appears to affect all low-income children who live in heavily black areas: Both black and white children seem to have longer odds of reaching the middle class, and both seem to benefit from moving to better neighborhoods.
The places most conducive to upward mobility include large cities — San Francisco, San Diego, Salt Lake City, Las Vegas and Providence, R.I. — and major suburban counties, such as Fairfax, Va.; Bergen, N.J.; Bucks, Pa.; Macomb, Mich.; Worcester, Mass.; and Contra Costa, Calif.
These places tend to share several traits, Mr. Hendren said. They have elementary schools with higher test scores, a higher share of two-parent families, greater levels of involvement in civic and religious groups and more residential integration of affluent, middle-class and poor families.
For low-income families, a home in places with these characteristics is often a financial stretch. Rachelle Hawkins, a 32-year-old single mother in California, rented an apartment in Contra Costa late last year with help from a Contra Costa nonprofit called Shelter, Inc., which paid her first month’s rent. She moved from a gritty neighborhood near Oakland and was homeless for a time. She makes about $29,000 as a customer-service agent in online banking and faces an annual rent bill of almost $17,000.
But she thinks the burden is worth it for her children, who are 4 and 6. “I don’t think my kids are going to remember what we went through,” Ms. Hawkins said. “They are absolutely better off, just because of the environment.”
In addition to studying the outcomes of more than five million children who moved, Mr. Chetty and Mr. Hendren also revisited the subjects of the Moving to Opportunity experiment. Working with Lawrence Katz, one of the original researchers to study the program, they analyzed more recent, richer data — and concluded that children who moved before they were teenagers did indeed benefit economically. (The original study had found health benefits for both younger and older children.)
In both studies, the younger children were when they moved, the better they did. Children were less likely to become single parents when they grew up, were more likely to go to college and to earn more. The original research had not been able to follow the economic outcomes of younger children, because not enough time had passed, Mr. Katz said.
Still, the more extensive nationwide data on moving found that older children were also affected by their neighborhood. The effect was what statisticians call linear: Each additional year in a different place had roughly the same average effect on a child’s adult earnings. A teenager’s year in a better neighborhood mattered as much as a 9-year-old’s year — but 9-year olds still had their teenage years in front of them.
Some economists who have seen the new study say that it argues for a new approach to housing policy. Current policy often forces the parents of young children onto waiting lists for housing vouchers. It also gives tax incentives to developers who build in poor neighborhoods, rather than rewarding those who build affordable housing in areas that seem to offer better environments.
In an interview Friday, Julián Castro, the secretary of Housing and Urban Development, said he was excited by the new data. Mr. Castro said his department had been planning to reallocate funding, so that some people moving to more expensive neighborhoods would receive larger vouchers. Currently, the value of vouchers tends to be constant across a metropolitan area.
The large county on the other end of the spectrum from Baltimore, with the best odds of escaping poverty, is DuPage County, Ill., west of Chicago. It contains suburbs where the schools are considered better and where housing costs more than in Chicago and some close-in suburbs.
In 2012, Latonya Polk decided to move there with her son and daughter, then 16 and 15. Her husband had been fatally shot on the front lawn of their apartment outside Chicago in 2011, in a crime that remains unsolved, she said.
Briana, her daughter, was hesitant about leaving her friends, but Mrs. Polk insisted, saying they could still visit them. “I knew absolutely it would mean better possibilities for my kids,” she said.
Mrs. Polk earns about $40,000 a year at a company that helps clear goods through customs. She has been able to afford the move by living in a cramped $1,025-a-month, one-bedroom apartment — and with help from a county program that gives them about $2,000 a year toward living expenses.
Although most places with better odds of escaping poverty have higher rent, the researchers did identify some counties as “upward-mobility bargains.” These include Putnam County, N.Y.; parts of the Pittsburgh and Altoona areas in Pennsylvania; and, if only relative to surrounding areas, Contra Costa.
The study defined low income as the 25th percentile of the income distribution — a household earning less than three-quarters of other households nationally, or about $30,000 a year for families with children. But the analysis covered the full income distribution, and the geographic patterns at the 25th percentile were very similar to those for poorer and somewhat less poor households.
The main innovation of the new paper — part of the Equality of Opportunity Project, involving multiple researchers — is its focus on children who moved. Doing so allows the economists to ask whether the places themselves actually affect outcomes. The alternative is that, say, Baltimore happens to be home to a large number of children who would struggle no matter where they grew up.
The data suggests otherwise. The easiest way to understand the pattern may be the different effects on siblings, who have so much in common. Younger siblings who moved from a bad area to a better one earned more as adults than their older siblings who were part of the same move. The particular environment of a city really does seem to affect its residents.
The data does not answer the question of whether the factors that distinguish higher-mobility places, like better schools and less economic segregation, are causing the differences — or are themselves knock-on effects of other, underlying causes. “We still need clarity on that,” Mr. Grusky, the Stanford professor, said.
From her perspective, Ms. Hawkins, the Contra Costa resident, said that the mixing of people from different social classes did make a difference.
“It’s all spread out here,” she said. In her old home in San Leandro, Calif., entire neighborhoods had high unemployment and crime, which led some people who did have jobs to flee, causing a downward spiral. “You don’t want to put your kid in harm’s way. That’s just extra stress.”
For all the benefits that moves can bring, they are not a solution to poverty, said people who have seen the new paper as well as the researchers themselves. Finding ways to improve those neighborhoods, for people who cannot or do not want to move, is also important, researchers and policy makers said.
“We can’t walk away from them,” Mr. Castro, the housing secretary, said. “We need a two-pronged approach.”