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Location Affects Low-Income Children’s Ability to Move Income Brackets as Adults

Posted on July 30, 2013

Map from The Equality of Opportunity Project. Lighter colors represent areas where children from low-income families are more likely to move up in the income distribution.

A new study examines how location affects the “relative mobility” of children who are raised in low-income households. Relative mobility is defined as “the difference in the expected economic outcomes between children from high-income and low-income families.” More simply put, relative mobility can be described as the chance that a child born into the lowest household income bracket has to be in the highest household income bracket in adulthood when compared to a child born into the highest. While previous studies of economic mobility have described how economic mobility can differ by gender and race, this is the first study to examine economic mobility by location, permitting further research to examine what kinds of circumstances and policies can improve upward economic mobility.

For example, the authors found that while a child born into the bottom fifth of household incomes in Atlanta has a 8% chance of reaching the top fifth in adulthood, a child raised in Seattle in the bottom fifth has a 14% chance of reaching the top fifth. The New York Times provides several infographics that allow readers to find out more about their own region. In Cleveland, 47% of children raised in the bottom fifth will be in the middle fifth or higher by adulthood, compared to 69% of children raised in the middle fifth.

The purpose of the study was to examine the effects of the Earned-Income Tax Credit (EITC), introduced to help families get out of poverty. However, the authors found little effects on upward economic mobility for both greater tax credits for the poor and higher taxes for the wealthy. Education also played an unclear role: the number of local colleges and their tuition rates had only modest or no correlation to upward economic mobility. The authors hope that their findings will encourage future studies of which location specific factors can affect economic mobility.

Last spring, the Schubert Center hosted Ariel Kalil, director of the Center for Human Potential and Public Policy at the Harris School of Public Policy Studies at the University of Chicago, for a lecture titled “Parenting and the Home Environments of Poor Children”. Kalil’s research examines how early childhood home interventions are an important part of combatting poverty. Several Schubert Center Faculty Associates conduct research on child poverty. Claudia Coulton and Robert Fischer are co-directors of the Center on Urban Poverty & Community Development, examining the effects of neighborhood poverty on children and families. Sharon Milligan studies urban poverty and neighborhood change initiatives. Anna Maria Santiago researches urban poverty and anti-poverty strategies. James Spilsbury conducts research on neighborhood poverty, exposure to violence and children’s mental health.

Read an article about the study in the New York Times.

Visit the study’s website.

Page last modified: March 24, 2014