Written by Lauren Cook, Program Analyst, NASCSP
New research has been released that emphasizes the impact of a child’s neighborhood on their chances of social mobility. Earlier this month, The Brookings Institution hosted a discussion titled “Place, Opportunity, and Social mobility: What now for Policy?” with Harvard Professor of Economics, Raj Chetty, and a panel of experts. As the national association charged with advocating and enhancing the leadership role of states in preventing and reducing poverty, and representing a network that works at the local, state, and federal level to revitalize communities and build individual and family self-sufficiency, we attended this panel discussion to learn more about this research and the implications it has for social policy and the work of the Community Action Network.
As part of the ongoing Equality of Opportunity Project, Harvard economics professors Raj Chetty and Nathaniel Hendren investigated the link between an individual’s neighborhood and upward mobility in a two-phase study. The core data consisted of anonymous earnings records from persons born between 1980 and 1982, and were used to measure intergenerational income mobility. The authors divided the United States into 741 commuting zones and found that intergenerational mobility changes depending on where in the United States an individual lives. For instance, the probability of a child who comes from a family in the bottom quintile of the income distribution reaching the top quintile of income earners in the U.S. is 8.5% higher in San Jose, California than in Charlotte, North Carolina. Moreover, high upward mobility areas were associated with less income inequality, greater social capital, greater family stability, better primary schools, and less segregation.
The authors joined with Lawrence Katz to study the Moving to Opportunity (MTO) experiment initiated by the Department of Housing and Urban Development (HUD) in a comparison to their recently found information. Dr. Chetty and his colleagues found that when providing families living in high-poverty neighborhoods with housing vouchers to live in low-poverty areas, their children (when they are less than 13 years old at the time of moving) were significantly more likely to attend college than children of the families who did not receive the voucher. Furthermore, children of the families who received the voucher earn 31% more annual income while in their mid-twenties than children of the families who did not receive the housing voucher. The authors found that positive long-term effects for children occurred when the child was 13 years old or younger at the time that their families moved to the low-poverty neighborhood.
Given the findings of this study, a next step is to examine the possible implications for social policies and programs in our communities. In his presentation, Dr. Chetty identified two possible policy approaches based on his recent research:
- Help people move to better areas.
As previously mentioned, the U.S. Department of Housing and Urban Development (HUD) has tested this approach in the ten year demonstration, Moving to Opportunity. The demonstration was held in five major U.S. cities, including New York City, where children who moved under the age of 13 were found to earn 30% more in adulthood. Based on the premise that childhood exposure is a key determinant of upward mobility, encouraging families with young kids to move to lower poverty areas improves outcomes for low-income children. Additionally, the increase in tax revenue from higher earnings in adulthood offsets the cost of the voucher. Dr. Chetty also stated that this approach may be more appealing to higher income residents as mixed income neighborhoods produce slightly better outcomes for the wealthy residents.
- Invest in places with low level of opportunity to replicate in better areas.
The second approach emphasizes place-based interventions that create or amend policies that improve existing neighborhoods. A challenge associated with this approach is the difficulty in identifying causal and long-term effects of local policies. Dr. Chetty discussed the five strongest correlates of upward mobility in order to give perspective on where to concentrate place-based strategies and policies. The five correlates are as follows: 1) Segregation, 2) Income Inequality, 3) Family structure, 4) Social Capital, 5) School Quality.
Dr. Chetty and many of the panel participants support the idea that policies should tackle social mobility at a local level with more focus on specific neighborhoods within cities. The study also implies that focus should be placed on improving childhood environments through the age of 20 rather than solely focusing on early childhood. This study presents possibilities in using big data to empirically evaluate other policies and measure local progress and performance.
The implications of this study support the place-based approach of community action. Within our network, local agencies are empowered to assess the specific needs of their communities and integrate evidence-based practices and innovative methods to tackle the barriers to achieving self-sufficiency. Additionally, our network generates big data each year that is analyzed to inform and refine our practices, and support results-oriented performance measurement and evaluation. Nationwide, Community Action programs and services enable families and individuals to move towards self-sufficiency and revitalize the communities in which they live and work. Visit the Equality of Opportunity website for county-specific data on social mobility and more information about the study. To hear Dr. Chetty’s presentation and the full panel discussion, watch the full event on the Brookings Institute website.