New York may not be the most beautiful city I have ever seen, but it definitely takes the cronut on constant energy and excitement. That’s because location is everything. It’s why Hamptons real estate is stratospherically expensive. It’s why semi-intelligent people such as myself semi-idiotically give up half our paychecks to live in Manhattan in the 100-million-degree summer. It’s why so many people decide to concentrate themselves in cities across the world.
A recent study by some of the United States’ top economists — Nathan Hendren and Raj Chetty, among others — combed through millions of American earnings records and revealed something fundamental about the hidden costs of location: Where people grow up may be the most important factor in determining whether they will strike American-dream gold or find themselves chained into their parents’ poverty. The study is the first to u
Use enough data to compare the factors that lead to upward mobility in different cities.
Southeastern and midwestern cities like Atlanta or Columbus, Ohio, had the lowest rates of social mobility, while northeastern cities like New York or western cities like Seattle had much higher rates. This disparity occurs even when you control for average income. Statistically, a child from the bottom 25th income percentile in Seattle will do as well economically as a 50th percentile child from Atlanta.
Surprisingly, the researchers found that intergenerational mobility was only slightly affected by higher taxes on the rich and lower taxes on the poor. They also found that the number of local colleges and their costs of entry did not affect mobility at all. What does this say about President Obama’s tuition proposal, I wonder?
Instead, the researchers found four key factors that affect intergenerational income mobility. Children who attended better primary schools, were raised in two-parent households and grew up in areas where many local people participated in religious or community groups were more likely to rise out of poverty. These first three points seem to revolve around the stability and consistency a community can provide for children. If poor children grew up in communities that also supported higher income families, they were also more likely to rise.
All four of these areas seem to make up very different parts of a child’s life — the home, the school, the church, the neighbors’ standards of living. But they all represent two things — structure and security. Provide these children with the proper role models and direction as they develop and form opinions about the world and they will do well for themselves. Take away their support too early or leave them in the weeds and in all likelihood, they will not rise to the same heights. The study found this to be true to the same extent across all races. Black, white, Latino — if you grow up in a community with these four structures, you have a good chance of advancing economically.
The salience of a structured upbringing is supported by the fact that young children who were born into a low-mobility area but moved into a high-mobility community did almost as well as those who had always lived there. Teenagers who made the same transfer did not see the same benefit. Clearly, the old refrain that poor people are poor because of an unchangeable part of the lazy character is not true. Many people live in poverty because they aren’t shown another path at a young age.
Countless studies show that the United States lags far behind other wealthy nations like the Netherlands, Germany, France, Australia, Canada and Japan in upward income mobility. This is probably because our government does not provide the same focus on community structures. Ours is a country of growing wealth disparity. If we want to change that, we should stop just throwing money and food stamps at parents and reinvest in providing them with an enriching environment for their kids so they have a better chance for a future free from poverty.
I have an out-of-the-box idea that may help us solve these problems.
Several studies have shown that the education levels of low-income students regress substantially more than high-income students over the course of the summer. The government could use that down period in school to bus in, for free or at a low cost, low-income students to the preeminent public schools. Uncle Sam would pay the regular teachers at these schools a salary premium and offer a large cash bonus to the teacher considered the best at each school as an incentive to stay. This way, the government could use otherwise fallow resources, good teachers would be happily compensated, low-income students would be exposed to highly enriching environments that would also help them fight the testing gap between rich and poor, and low income parents would receive free daycare. Everyone wins.
Nico Enriquez ’16 is out of space but he would love to discuss any other ideas you may have. Please comment, email (nenriquez3@gmail.com), or find him on campus (you’ll probably see him on a longboard).
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