Growing Up in Poor Neighborhoods

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A recent study by Jonathan Rothwell and Douglas Massey analyzes the impact of growing up in poor neighborhoods and its impact on the future of the kids living there. We know a lot about how growing up in a low income family affects future earnings, but there is less research on how growing up on the wrong side of the tracks can impact future opportunities. The authors´ main objective was, as a result, comparing how a kid from poor parents would fare compared to the same kid if he had lived in a bad neighborhood. At the same time, they looked at how the the children of wealthy parents do when growing up in a poor corner of town.

The results are pretty staggering. Leaving all other things equal, moving a kid from an area in the bottom 25% of the income distribution to one at the top 25% yields $635,000 in additional lifetime earnings. As a matter of comparison, the lifetime premium of a college education is $1.1 million - so just moving a family from Hartford to Avon will yield about half of that return at no cost, even if the kids do not go to college. You can read more on this research here.

The implications for Connecticut, by the way, are considerable. Income segregation is, after all, one of defining features of our state. Mixed income neighborhoods are great at promoting social mobility; unfortunately, our state does not have many.

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