Children in higher income families raised in high poverty neighborhoods are 53% more likely to be worse off economically than their parents when compared to those raised in communities with lower poverty rates, according to a July report by the Economic Mobility Project, an initiative of the Pew Charitable Trusts.
The report finds that fewer than 10% of white children but twothirds (66%) of black children grow up in neighborhoods with poverty rates of 20% or more. Controlling for individual family characteristics, this disparity alone may explain much of why black children experience downward economic mobility more frequently and upward economic mobility less frequently than whites.
Further, the study finds that black children who live in neighborhoods where the poverty rate declined while they were growing up had higher incomes in adulthood than those who did not experience such a change in neighborhood income level. The study concludes that the improvements in economic outcomes observed in the analysis were not due to the characteristics of the children or their families but instead “attributable exclusively to changes in the local environment surrounding the youth.”
As a policy recommendation, the author offers that investments in poor neighborhoods “could have powerful effects on the economic trajectories of children living in the most disadvantaged communities.” The study cites neighborhood interventions such as the Jobs-plus program, the Milwaukee New Hope program, and the Harlem Children’s Zone as programs to emulate. These programs are also presented as something of a counterpoint to programs that aim to deconcentrate poor families by helping some families to move away from the neighborhood, such as Moving to Opportunity, HOPE VI, and Chicago’s Gautreaux program.
These policy implications, however, are based more on a reading of the growing assessment literature on these existing programs than on the original research presented in this report. The research in this report validates the notion that neighborhood quality is an important variable in children’s future opportunities and therefore for economic mobility policy, but it has less to say about the proper approach to take in addressing the problems of low opportunity neighborhoods.
Though the report does not explicitly discuss housing as a variable, it does note in the appendix that households in the treatment group, those who experienced declining rates of neighborhood poverty in the period from 1980 to 1990 and on average better economic outcomes, lived in households that were considerably less likely to own a home.
The study uses the Panel study of Income Dynamics (PSID) to compare parents’ economic status (measured by income quintile) to that of their children. The study covers two groups of children, one group in which the children were born from 1955 to 1970 and another that includes children born 30 years later from 1980 to 2000. Income and poverty for the parents’ generation was measured for all years that the child was under 18 and the parents were at least 26. The measurements for the children’s generation was for the years where the child was over 26 and determined to be the head or the spouse of the head of the household.
The report, authored by Patrick Sharkey, can be found at: http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/EconomicMobility/PEWSHARKEYv12.pdf?n=1399