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Neighborhoods Shape Economic Futures of Children in the U.S., Study Finds

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BNN Correspondents
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Neighborhoods Shape Economic Futures of Children in the U.S., Study Finds

Recent research from economists at Brown University, Harvard University, and the U.S. Census Bureau underscores the profound role neighborhoods play in shaping the economic future of children in the United States. The findings, presented at a World Bank conference, reveal that factors such as school district quality, poverty rates, and social capital within a community can have enduring effects on children's income trajectories into adulthood. The study leverages data from the Opportunity Atlas, a tool developed by the Opportunity Insights research program, to chart the adult outcomes of children across the U.S.

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Neighborhoods and Economic Futures

Neighborhoods are more than just geographical locations—they significantly influence a child’s future earnings. The study indicates that there can be substantial income disparity in adulthood between those growing up in one neighborhood compared to an adjacent one. The research also highlights the importance of the age at which a child moves to a higher mobility neighborhood, with older children reaping fewer benefits from such moves.

Relative Mobility and Absolute Mobility

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The researchers make a critical distinction between relative and absolute mobility. Relative mobility refers to the likelihood of rising to the top of the income distribution, while absolute mobility is the chance for a child born into poverty to achieve a higher standard of living. Strikingly, the U.S. lags behind other developed nations in terms of relative mobility, with a mere 13.1% average probability that a child of parents in the bottom half will rise to the top. This challenges the ideal of the American dream.

Implications and Future Directions

The study’s findings emphasize the importance of early exposure to advantageous environments for better chances of success in adulthood. It suggests that policy interventions aimed at improving neighborhood conditions could have a significant, long-lasting impact on child outcomes. This research underscores the crucial role that socio-economic environments play in shaping economic futures and highlights the need for further investigation and intervention to foster equal opportunities for all children, irrespective of their neighborhood of upbringing.

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