Harvard University’s Equality of Opportunity Project released two studies in early May. The Equality of Opportunity Project researches upward mobility in the U.S., focusing on how the nature of a neighborhood affects economic mobility. These two studies found that every year of exposure to a better neighborhood improves a child’s chances of economic success later in life.
The first study, titled The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates, looked at five million families that moved across counties, focusing on children in families at the 25th percentile of the income distribution. The study found that every extra year that a child spends in a better neighborhood environment improves the child’s economic outcome as an adult, indicated by measures such as income, likelihood of college attendance, and probability of avoiding teenage pregnancy. Children who moved at an older age still benefited from an improved environment over time. The study also found that counties with higher rates of upward mobility among low income children tend to have less economic and racial segregation, lower levels of income inequality, better schools, lower rates of violent crime, and a larger share of two-parent households. However, counties with higher levels of upward mobility also tended to have higher rents.
The second study, titled The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment, presents new evidence from the Moving to Opportunity (MTO) experiment. MTO allowed randomly selected families that lived in high-poverty housing developments to move to lower-poverty neighborhoods using housing vouchers. Prior research concluded that the MTO experiment had little to no impact on income or other indicators of improved economic outcomes. Using new tax data, researchers assessed the longer-term outcomes for children who moved at a younger age as part of the MTO experiment. They found that children who were younger than 13 when their family moved to a lower-poverty neighborhood increased the child’s adult earnings by about 31%. There were no statistically significant improvements in adult income for children who moved after age 13. Children who were younger than 13 when they moved also live in better neighborhoods as adults and are less likely to be single parents.
These studies offer new evidence on the importance of the effects of neighborhood on upward mobility. Variation in the effects differs for boys and girls, depending on the child’s age when their family moves. Despite the variation, the results of the two studies suggest that moving children from high-poverty areas to lower-poverty areas may play a large role in decreasing the intergenerational persistence of poverty.
More information on the Equality of Opportunity Project and studies are at http://www.equality-of-opportunity.org/index.php/papers.
An interactive map on upward mobility by county is at http://www.nytimes.com/interactive/2015/05/03/upshot/the-best-and-worst-places-to-grow-up-how-your-area-compares.html?abt=0002&abg=1