We know you’ve got to choose the right parents if you want to wind up higher on the income scale — or so the research tells us. Now we’ve got a massive data analysis telling us they’ve got to choose the right zip code. And they’ve got to do it while you’re young, preferably before you turn ten.
The analysis was the focal point of a recent “conversation” about place, opportunity and policy hosted by the Brookings Institution. Featured speaker was the lead analyst, Harvard economics professor Raj Chetty.
Some mind-opening data, a handful of policy recommendations and a striking (to me) focus on race discrimination. Summary, brief as I could make it, follows.
Place Matters for Children’s Future, With Caveats
Children born in the bottom fifth of the income scale have a much better chance of moving to the top fifth as adults if they grow up in a community that gives them and their families advantages like decent schools, safe homes and streets, ready access to jobs and beneficial networks. No surprise here. But new numbers, some surprising.
Chances for low-income children raised in Washington, D.C. are 10.5%. This is better than the national average — 7.5%. And it’s a whole lot better than their counterparts’ chances in most of the deep South. But their chances would be better if they’d grown up in San Jose, California, hub of the Silicon Valley.
Shifting the income level, as the breakouts do, children whose families have incomes in the bottom quarter of the income scale will earn 5.8% more as young adults if they grow up in D.C. than if they’d grown up in “an average place.” But if they’d grown up in nearby Fairfax County, they could look forward to more than double that relative income gain.
In short, place matters, as another recent study also showed. This one, also co-authored by Chetty, reevaluated results of the U.S. Department of Housing and Urban Development’s Moving to Opportunity pilot.
Families got housing vouchers, but only if they moved to lower-poverty neighborhoods. An earlier evaluation measured increases in parents’ employment and income. Basically, zip.
But when Chetty and his colleagues looked at how preteens fared as adults, they found a 31% boost in earnings, compared to peers whose families didn’t get the MTO vouchers. This, I would guess, is at least partly because the young MTO beneficiaries had a higher college attendance rate.
For older children, however, moves to opportunity had negative effects on earnings, as well as other measures. The disruption of the move outweighed the advantages of living in a higher-income neighborhood, the researchers say.
What Public Policies Could Do
At the highest plane, these findings support two policy thrusts. The first is to help more families move out of high-poverty neighborhoods — and to do so while their children are very young. That would seem to require more housing vouchers, perhaps with subsidies scaled to encourage use in mixed-income neighborhoods.
But there’d have to be more relatively low-cost housing in those neighborhoods too. Several panelists at the Brookings event had quite a bit to say about exclusionary zoning, e.g., density limits that cap building height and/or prohibit multi-unit housing.
At the same time, it’s both practically and theoretically infeasible to move all poor and near-poor families out of high-poverty neighborhoods. And not all families want to move, fearing loss of “social capital,” e.g., connection to a local congregation, supportive friends nearby.
So the second major policy thrust is to improve those neighborhoods. Oddly, Chetty and panelists didn’t delve into the how issue, though one recommended diversifying public housing locations so as to dilute the poverty concentration.
Discussion focused mostly on affording families in high-poverty neighborhoods access to opportunities elsewhere — better schools especially. Recurrent, favorable references to vouchers, lotteries and charter schools. One panelist also mentioned redrawn public school attendance zones.
Chetty himself believes we need more “big data” analyses to pinpoint initiatives that would make economically-disadvantaged neighborhoods less disadvantageous for the children growing up in them.
But he did cite possibilities, based on his research to date — specifically, neighborhood characteristics correlated to better (and worse) outcomes for kids. Big news here is that the race in the place matters a lot.
Race Matters for All Children
We all know now, if we didn’t before that our public safety and criminal justice systems often make life worse — if they don’t end it — for residents in predominantly black neighborhoods. The victims are usually blacks.
What Chetty’s research tells us is that the racial makeup of a neighborhood affects economic mobility for whites, as well as blacks. Outcomes worsen as black density increases for both, he said.
We don’t need his research, though we’ve got it now to identify major factors — under-funded schools with over-crowded classrooms, less experienced teachers and insufficient resources to mitigate disadvantages that impair children’s ability to learn, lack of convenient public transportation, etc.
What Policies Have Done and Could
Plowing more money into the schools, transportation systems and the like would seem a solution to the drag on upward mobility that living in a predominantly black neighborhood exerts. And indeed, it is, but not the only one. Nor sufficient because it would address symptoms, but not root causes.
Several panelists zeroed in on the latter. Predominantly black neighborhoods — and their attendant disadvantages — didn’t just happen, they stressed. The neighborhoods reflect housing segregation policies dating back to the 1920s.
And we’ve still got policies that perpetuate segregation. More widespread private-sector practices, however, e.g., selective treatment by real estate agents, egregiously unequal mortgage loan terms.
The 1968 Fair Housing Act was supposed to dismantle segregation and prevent further discrimination on various bases, including race.
But weak and/or co-opted local agencies let business go on as usual. And HUD has never had to resources to effectively enforce the law. Nor has it always been allowed to do what it could, as a ProPublica report indicates.
HUD has proposed new rules that would put teeth into the Fair Housing Act’s requirement that it — and thus state and local agencies — “affirmatively further” the purposes of the law. The final rules — assuming they’re issued and enforced — could make place matter less for low-income children’s chances of moving up the income scale. Make life better for their parents too.
But they won’t make every place a launching pad for upward mobility. For that, we need a broader range of policy initiatives. Bigger investments in equalizing opportunities too.