The Opportunity Atlas: Childhood Roots of Social Mobility
BY RAJ CHETTY/School Administrator, June 2019

Economist Raj Chetty at Harvard University led a study on how one’s particular neighborhood as a youth applies a defining impact on post-schooling futures.

Which neighborhoods in America offer children the best chances of climbing the income ladder? To answer this question, I worked with colleagues at Opportunity Insights and the U.S. Census Bureau to construct the Opportunity Atlas, a freely available interactive mapping tool that traces the roots of outcomes such as poverty, incarceration and teenage birth rate back to the neighborhoods in which children grew up.

Using this tool, you can see exactly where and for whom opportunity is lacking in your community and develop customized solutions to improve children’s outcomes.

The Opportunity Atlas uses anonymized data on 20 million Americans who are in their mid-30s today. We mapped these individuals back to the Census tract in which they grew up. For each of the 70,000 tracts in America, we estimate children’s average earnings, incarceration rates and other outcomes by their parental income level, race and gender.

The data yielded these four insights among several others into how neighborhoods shape children’s trajectories.

» Children’s outcomes in adulthood vary sharply across nearby neighborhoods.
Children who grow up a few miles apart in families with comparable incomes have very different life outcomes. Consider incarceration rates for black men who grew up in very low-income families in central Los Angeles. On April 1, 2010, the day of the 2010 Census, 44 percent of black men who grew up in one census tract in Watts were incarcerated. By contrast, 6.2 percent of black men who grow up in families with similar incomes in central Compton, 2.3 miles south of the Watts tract, were incarcerated on that day.

Similar variations exist in a spectrum of other outcomes — from earnings to teenage birth rates — across nearby neighborhoods in most cities in America. In rural areas too, neighboring towns often exhibit sharply different outcomes for local children.

» Moving to a better neighborhood earlier in childhood can increase a child’s income by several thousand dollars.
Children who move to high upward-mobility neighborhoods earlier earn more as adults. Consider the average income (at age 35) of children raised in low-income families who move from the central district of Seattle, a low upward-mobility area, to Shoreline, a high upward-mobility area 10 miles north. Children who make this move at birth earn $9,000 more per year than those who move in their 20s.

Using data from the Moving to Opportunity Experiment, we found, on average, relocating within one’s metro area from a below-average to an above-average neighborhood in terms of upward mobility would increase the lifetime earnings of a child growing up in a low-income family by $200,000. Children who grow up in better areas also are less likely to be incarcerated and are less likely to have teen births.

The lesson from these findings is not necessarily that moving is the best solution to increasing upward mobility, but rather that the low rates of upward mobility observed in some areas can be changed. By studying the places that produce the best outcomes for low-income children, one may be able to replicate those successes in other areas through place-focused investments.

» Historical data on children’s outcomes are a useful predictor of children’s prospects for upward mobility today.
Our measures of economic opportunity differ from existing neighborhood-level measures of opportunity because we directly study children’s actual outcomes, rather than proxies such as poverty rates, homeownership rates or test scores. By directly studying outcomes, we avoid difficult-to-test assumptions about which proxies best predict children’s outcomes.

The drawback of our outcome-based measures is that they come with a lag because one must wait until children grow up to see their earnings. However, we find that places that produced good outcomes in the past typically produce good outcomes a decade later. Moreover, historical outcome data are much better predictors of outcomes than more recent data on poverty rates or test scores. Our estimates are thus highly informative predictors of economic opportunity even for children today, although they should be combined with additional analyses and on-the-ground knowledge in areas that have changed substantially.

» The new data uncover “opportunity bargains” — affordable neighborhoods that produce good outcomes for children.
On average, higher-opportunity neighborhoods have higher costs of living, but many areas appear to be “opportunity bargains.” These are places that produce good outcomes for children without high rents.

The availability of low-rent, high-opportunity neighborhoods suggests that affordable housing policies could be redesigned to produce larger gains for children without increasing government expenditure. More broadly, the existence of opportunity bargain areas shows that creating pathways to opportunity need not require reproducing conditions in highly affluent, expensive neighborhoods.

RAJ CHETTY is the William A. Ackman professor of public economics at Harvard University and director of Opportunity Insights. Twitter: @OppInsights