How do neighborhoods affect economic opportunity?

The American Dream continues to thrive in some parts of the country. The map below shows the chances of rising out of poverty to the top of the income distribution based on where children grew up.


The Geography of Upward Mobility in America

Children's Chances of Reaching Top 20% of Income Distribution Given Parents in Bottom 20%
Childhood Exposure Effects

Click for more details on figure
This map shows rates of upward mobility for children born in the 1980s for 741 metro and rural areas ("commuting zones") in the U.S. Upward mobility is measured by the fraction of children who reach the top fifth of the national income distribution, conditional on having parents in the bottom fifth. Lighter colors represent areas with higher levels of upward mobility.


The differences in upward mobility across areas are caused by differences in childhood environment. Studying the experiences of seven million children who moved across areas while growing up, we document that every year of exposure to a better environment improves a child’s chances of success.

Gain from Moving to a Better Neighborhood

By Child's Age at Move
Childhood Exposure Effects

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This figure plots the percentage gain from moving to a better area by the age at which the child moves, based on an analysis of 5 million families who moved across metro areas in the U.S. For example, children who move at age 9 have outcomes that are about 50% between the outcomes of children who grow up permanently in the origin and destination areas. Those who move at later ages get less of a gain from moving to a better area.


Can policies that improve children's neighborhood environment improve their outcomes in adulthood? The Moving to Opportunity experiment gave vouchers to low-income families to move to better neighborhoods and led to substantial increases in children’s earnings as adults, increases in college attendance, and reductions in out-of-wedlock births.

Cost Effective Policy

Effects of the Moving to Opportunity Experiment on Individual Income in Adulthood Cost Effective Policy (MTO experiment)

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This figure shows the average earnings of three groups of children whose families enrolled in the MTO Experiment before they turned 13: those who grew up in public housing projects (Control), those who received standard Section 8 housing vouchers, and those who received vouchers to move to low-poverty neighborhoods (experimental).

Where are the best places to grow up? Chetty and Hendren (2016) estimate the causal effect of growing up in each county in the US. The table below shows the percentage gain (or loss) in income from growing up in each of the 100 largest commuting zones (metro areas) or counties in the U.S. for children in low-income families (25th percentile).

Local Area Rankings

Causal Effects of the 100 Largest Commuting Zones (Metro Areas) on Household Income in Adulthood

Rank Commuting Zone State All Kids Boys Girls
Seattle Washington 11.6% 9.1% 14.2%
Minneapolis Minnesota 9.7% 9.2% 10.1%
Salt Lake City Utah 9.2% 3.6% 15.3%
Reading Pennsylvania 9.1% 8.4% 9.7%
Madison Wisconsin 7.4% 10.4% 3.9%
Des Moines Iowa 6.6% 4.7% 8.5%
Omaha Nebraska 6.4% 5% 7.8%
Washington DC District Of Columbia 5.8% 4.7% 7.1%
Spokane Washington 5.6% 8.1% 2.7%
Portland Oregon 5.2% 7.6% 2.6%
Bakersfield California 4.7% 7% 2.2%
Harrisburg Pennsylvania 4.6% 5.4% 3.6%
Syracuse New York 4.5% 7.9% 0.6%
Canton Ohio 4.2% 8% 0%
Fort Worth Texas 3.7% 5.8% 1.4%
Las Vegas Nevada 3.7% -1.7% 9.6%
Portland Maine 3.7% 6.5% 0.6%
San Diego California 3.3% 1.1% 5.7%
Erie Pennsylvania 3.3% 6.5% -0.3%
Tulsa Oklahoma 3.3% 3.7% 2.8%
Toms River New Jersey 2.9% -1.1% 7.4%
Honolulu Hawaii 2.9% 2% 3.8%
Santa Barbara California 2.7% 0% 5.5%
San Francisco California 2.5% -0.3% 5.6%
Pittsburgh Pennsylvania 2.1% -0.1% 4.6%
Boston Massachusetts 2.1% 3.3% 0.8%
San Jose California 1.9% -7.6% 12.4%
Manchester New Hampshire 1.6% 3.7% -0.7%
Denver Colorado 1.3% 2.1% 0.5%
Allentown Pennsylvania 1.3% -2.2% 5.1%
Brownsville Texas 1.2% 2.6% -0.3%
Santa Rosa California 1.1% 0% 2.3%
Eugene Oregon 1% 2.9% -1%
Oklahoma City Oklahoma 1% 0% 2.2%
Phoenix Arizona 0.7% -3.2% 5%
Modesto California 0.6% -2% 3.4%
Cleveland Ohio 0.5% 5.7% -5.1%
Sacramento California -0.2% -4.5% 4.6%
Providence Rhode Island -0.3% -0.1% -0.5%
Newark New Jersey -0.3% 2.3% -3.2%
Little Rock Arkansas -0.4% 6.7% -8.1%
Buffalo New York -0.5% -0.5% -0.4%
Scranton Pennsylvania -0.5% -4.2% 3.6%
Gary Indiana -1% 5.5% -8.2%
El Paso Texas -1.4% 0.9% -3.9%
Grand Rapids Michigan -1.4% 0.2% -3.2%
Louisville Kentucky -1.7% 1.4% -5%
Kansas City Missouri -1.7% -2.5% -0.8%
Columbus Ohio -1.8% 3.6% -7.7%
Philadelphia Pennsylvania -2% -5.2% 1.6%
Springfield Massachusetts -2.2% -0.8% -3.6%
Albany New York -2.3% 2.9% -7.9%
Cincinnati Ohio -2.3% -0.1% -4.7%
Jacksonville Florida -2.6% 1.9% -7.5%
Dallas Texas -2.7% -8.7% 3.9%
Miami Florida -2.8% -6.1% 0.9%
Houston Texas -2.8% -5.6% 0.3%
Toledo Ohio -2.9% -1.8% -4%
Youngstown Ohio -3.2% 2.8% -9.9%
Rockford Illinois -3.5% -4.3% -2.5%
Dayton Ohio -3.7% -4.3% -2.9%
Lakeland Florida -4.1% -5.1% -3%
Austin Texas -4.3% -4.3% -4.2%
Bridgeport Connecticut -4.6% -6.8% -2.1%
Knoxville Tennessee -5% -1.6% -8.8%
St. Louis Missouri -5% -3.6% -6.5%
Milwaukee Wisconsin -5.4% -6.8% -3.9%
Nashville Tennessee -5.5% -3.4% -7.7%
South Bend Indiana -5.6% -3.6% -7.6%
Richmond Virginia -5.8% -4.8% -6.7%
Mobile Alabama -6.5% -6.3% -6.6%
Indianapolis Indiana -6.6% -3.1% -10.4%
Cape Coral Florida -6.8% -14.7% 1.9%
Albuquerque New Mexico -7% -11% -2.7%
Sarasota Florida -7.2% -9.1% -5%
Tampa Florida -7.4% -10% -4.4%
Atlanta Georgia -8.1% -7.9% -8.2%
Baltimore Maryland -8.2% -14.3% -1.4%
Tucson Arizona -8.2% -18.7% 3.4%
Poughkeepsie New York -8.2% -8% -8.4%
Pensacola Florida -8.4% -10.4% -6.1%
New York New York -9% -8.2% -9.9%
Los Angeles California -9.2% -12.3% -5.8%
Virginia Beach Virginia -9.4% -14.3% -4%
Detroit Michigan -9.5% -15.4% -2.8%
San Antonio Texas -9.7% -10% -9.2%
Port St. Lucie Florida -9.9% -15.3% -3.7%
Baton Rouge Louisiana -10.4% -4.8% -16.5%
Birmingham Alabama -10.5% -12.8% -7.9%
Chicago Illinois -11.1% -14% -7.7%
Fresno California -11.1% -14.5% -7.2%
Orlando Florida -11.4% -13.4% -9%
Memphis Tennessee -11.6% -11.1% -12.1%
Greenville South Carolina -12.2% -12.7% -11.5%
Raleigh North Carolina -12.6% -11.8% -13.3%
Columbia South Carolina -13.9% -16.3% -11%
Charlotte North Carolina -14.4% -11.3% -17.5%
Greensboro North Carolina -14.8% -15.9% -13.3%
New Orleans Louisiana -14.8% -11.1% -18.6%
Fayetteville North Carolina -17.8% -17.8% -17.6%



Commuting Zones
Counties

For example, if a child were to grow up in the Seattle metro area instead of an average place, he/she would make about 12% more at age 26. The average level of household income at age 26 is $26,000, so this 12% gain translates to $3,120 of additional income.

How can we reverse the decline of the American Dream? Our research looks to cities where children’s chances of moving up out poverty remain high. Cities with high levels of upward mobility tend to have five characteristics: lower levels of residential segregation, a larger middle class, stronger families, greater social capital, and higher quality public schools.

We continue to study what policies can promote upward mobility and provide data to help others join in the effort to revive the American Dream.