The county, or neighborhood, where you grow up has a tremendous impact on your lifetime earning potential.
That was the main finding of a recent analysis of social mobility data by Harvard’s Equality of Opportunity Project.
Research revealed that not all neighborhoods are created equal when it comes to how easy it is for children to rise out of poverty in adulthood. For instance, a child raised in a poor home in San Jose, California, has nearly a three times greater chance of rising to the top of the income ladder than a child born in Atlanta.
Though the study focused on upward mobility within the United States, Raj Chetty, a Harvard professor and one of the lead researchers of the study, made this international comparison at a recent event at the Brookings Center on Children and Families.
“Your chances of achieving the American Dream are almost two times higher … if you are growing up in Canada than in the United States,” Chetty said.
The study examined what happened to kids who grew up in certain households and then moved, especially kids who moved across county lines. Researchers looked at the tax records of more than 5 million American families in conducting the analysis.
“Kids who moved early, so they were young when they got to the new neighborhood, really grew up looking like kids – in terms of income characteristics – who were from the new neighborhood from birth,” Dr. Rick Harper told WUWF.
The study revealed that several factors, including the prevalence of two-parent households, quality of schools, segregation of income and race, income inequality and crime rates, seem to have a direct impact on a child’s future financial success.
The upward mobility analysis said that 1 in 3 children who are raised in affluent families make a minimum of $100,000 by the time they’re 30. In lower-income brackets, that stat drops to 1 in 25.
The study said moving a young child out of public housing to a better-off area using a subsidized voucher has the potential to increase the child’s total lifetime earnings by $302,000.
… offering low-income families housing vouchers and assistance in moving to lower-poverty neighborhoods has substantial benefits for the families themselves and for taxpayers. It appears important to target such housing vouchers to families with young children – perhaps even at birth – to maximize the benefits. … More broadly, our findings suggest that efforts to integrate disadvantaged families into mixed-income communities are likely to reduce the persistence of poverty across generations.
So, according to this research, where are the best places to grow up (if you want to make a decent amount of money as an adult)? Check out The New York Times interactive map to see how individual counties measure up.
What do you think of the study’s findings? Do they ring true in your own life? Share your comments below.