Achieving the ‘American dream?’ A lot of it depends on where you grow up

Where a child grows up in the U.S. is becoming an increasingly critical component toward determining their future economic status.

Research from economists at Brown University, Harvard University and the U.S. Census Bureau shows that the numerous variables that define neighborhoods — such as the quality of their school districts, poverty rates and conditions that influence social capital in a community — all have lasting impacts on children’s future income. The research’s findings were presented earlier this year comparing mobility levels around the world at a World Bank conference.

While it may seem obvious that a good neighborhood may translate into better chances for success in adulthood, it also highlights that being immersed in these areas at a young age is important — and that sociological forces, while difficult to quantify, play an important role in economic prospects.

These insights could help to shift the tide against worsening rates of intergenerational mobility in the U.S. by informing policymakers as to which decisions could be the most influential in shaping upward prospects, according to John Friedman, professor of economics at Brown University and co-director of Opportunity Insights. Given the geographic span of the U.S., intergenerational mobility varies across a national scale. Yet even when focusing on just an intra-city level, mobility can differ widely between neighborhoods across the street from each other, Friedman said.

Friedman and his colleagues at Opportunity Insights research program created the Opportunity Atlas, which tracks children’s outcomes in adulthood using U.S. Census and tax data. The data shows adult a child an earn an average of $56,000 as an adult if they grow up in one neighborhood, versus just $33,000 if they grow up in an adjacent area.