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How important are the quality of neighborhoods in determining the future income of children?
According to a recent study by a pair of Harvard economists, quite a bit.
The study, The Effects of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County Level Estimates, by Raj Chetty and Nathaniel Hendren, analyzed data from more than 2,400 counties and determined that where you live isn’t just correlated with poverty — it causes it.
And for children living in poor families in Buncombe County, escaping poverty may be tougher — substantially tougher — compared to other counties across the nation.
Essentially, the study found, for poor children in Western North Carolina, it is better to live in Jackson, Watauga or Yancey counties than it is to live in Buncombe County, measured by how much that person would later earn at age 26.
MORE: View all counties in this interactive graphic, via the New York Times.
David Bailey, the president and CEO of United Way of Asheville and Buncombe County, said his organization grapples with the day-to-day hardships of poverty.
And while the agency’s programs are able to support struggling families find shelter, health care, and food, he said he believes that the weight of poverty on long-term success is also a major challenge.
“Poverty is a complex issue, but it’s definitely an anchor on family’s lives,” he said.
The recent study by Chetty and Hendron suggests that while poverty is a substantial burden, the chances of escaping it may vary from place to place throughout the nation.
In Buncombe County, the study estimates children living in families with an income of roughly less than $30,000 per year will earn 13.1 percent, or $3,420, less than the national average (the average level of household income is $26,000) by the time they are 26.
Of the counties in the study, Buncombe ranked better than only 4 percent, making the county of nearly 250,000 people on par with urban areas such as Cook County, Ill. (Chicago), Mecklenburg County (Charlotte) and Baltimore County, Md. That’s in contrast to places like King County, Wash., where children there will earn $2,960 more than the average American, or in Fairfax County, Va., where children will earn $3,150 more than the average American — which is better that 86 percent of the counties in the study.
In other Western North Carolina counties, income mobility varied. In Yancey County, for example, a child in a poor family would earn $660, or 3 percent, more. That’s the highest among the 18 westernmost counties. In Watauga County, a child would earn 2 percent more. Elsewhere, such as in Haywood County, children will earn $150 more than the national average; in Swain $90 more; and in Transylvania County, $1,660 less.
Future income in Buncombe County differed by income level, too. Children in families in the upper 25 percent of household income will earn $530 below the national average; middle income children (middle 50 percent of U.S. household incomes) will earn $2,080 below the national average.
The predictions of the study, which was to estimate the impact of living an additional year in each county throughout the nation, were based on tax data from 5 million children whose families moved from one place to another in 1996 to 2012.
The study challenged an oft-cited “Moving to Opportunity” experiment that suggested there was no difference in the impact of different low income neighborhoods on upward mobility. Not only does this research dispute that suggestion, it finds that each year spent in neighborhoods with certain characteristics improve — or detract — from long-term earnings.
While moving to a better neighborhood may be a solution, the findings may have implications for how local policy makers wrestle with poverty and income mobility.
One remedy, said Asheville City Council member Gordon Smith, is mixed-income housing.
In fact, while the Harvard researchers don’t identify specific causes of poverty, they found that certain characteristics, including racial and economic segregation, correlate with upward mobility. The paper’s authors suggest that five neighborhood factors correlate with upward mobility: in addition to segregated neighborhoods, children tend to do worse in places with high rates of single-parent homes; with high levels of income inequality and violent crime; and where schools are substandard.
However, which of these factors is more meaningful isn’t clear.
Smith isn’t surprised by the results of the study, but said that “relearning” the extent of the problem is alarming.
Smith said the lack of affordable housing and lagging wages are a key factor impacting economic mobility in Asheville.
He said Asheville’s city council recognizes the value of mixed-income communities to help lift low-income families out of poverty. Plans are underway to bulldoze and rebuild Lee Walker Heights, Asheville’s oldest public housing community, into mixed-income housing.
“Economic segregation limits opportunities,” Smith said. “Poverty is self-perpetuating, and in low income neighborhoods it can be more difficult for younger people to identify and access economic opportunities. Mixed-income communities allow low income people to see all walks of life and wealthier people to better connect with the experience of low income families.”
While the paper’s authors suggest local policy makers are likely best suited to address income mobility, Smith sees the need for support from Raleigh, too.
“We’ve seen budget cuts and state government closing off funding sources to local government,” he said. “Good policy is good policy, whoever comes up with it.”