Neighborhoods Matter

Ironically, in the land of opportunity, resident success is largely determined by one’s childhood address.  New research suggests that children’s opportunities for upward economic mobility is, at least in part, shaped by the neighborhoods in which they are raised or spend significant time during their formative years.  Recent studies have found substantial variations of upward mobility across various neighborhoods, communities and metropolitan areas.  For example, one-fourth of the gap in intergenerational economic mobility between blacks and whites can be attributed to the neighborhood in which they are raised.

Based on this new information, either neighborhoods have a causal effect on future life outcomes and upward mobility or there are systemic differences in the types of people that reside in neighborhoods.  Either way, Grassroots Grantmakers seek to seriously consider the research to help devise strategies that reshape neighborhoods to reflect places that give our youngest residents the support needed to successfully transition into adulthood.

“What we have come to realize is that historical data on children can be leading indicators of economic opportunity; however, this data should be combined with additional qualitative analyses and on-the-ground knowledge.” – Roderick Wheeler, Executive Director of Grassroots Grantmakers

The Opportunity Atlas, a free interactive mapping tool that measures the impact of childhood neighborhoods, was recently launched to provide stakeholders with the data needed to learn more about why neighborhoods matter.  By using this tool, grantmakers, civic leaders, residents and key stakeholders can identify specific communities that may limit opportunities and develop targeted investment strategies, at the neighborhood level, to improve the chances of upward mobility for all residents.

Economic Mobility Varies by Neighborhoods

Based on the data from 20 million individuals living in approximately 70,000 neighborhoods, social scientists and economist can estimate future earnings, incarceration rates, and other quality of life measures of children residing in every neighborhood in America.  From one neighborhood to another, adult outcomes can vary greatly even among residents with comparable incomes yet are only separated by a few miles.  For example, in the report, Impacts on Neighborhoods on Intergenerational Mobility, highlights the incarceration rates of children living in two Los Angeles neighborhoods, Watts and Compton.  Nearly half (44%) of all children raised in the Watts neighborhood were incarcerated the day of the 2010 Census, compared to just 6.2% of adults who were raised two miles away in a neighborhood in central Compton.   The question we now must ask ourselves when investing in neighborhood improvement, why do incarceration rates vary dramatically between these two neighborhoods despite having similar resident characteristics?

Economic Mobility Varies by Residents Within the Same Neighborhoods

What the research also informs us is that it is very difficult to say a neighborhood is either good or bad.  Neighborhoods can be very good for some people, yet not so good for other people living in that same neighborhood.  In a single neighborhood, adult outcomes could vary widely between racial and gender sub-groups.  When disaggregating the data sets, researchers found different outcomes for different sub-groups in the same neighborhoods.  Therefore, community philanthropy must seek additional information from individuals to learn more about what accounts for the differences experience by residents and how can we invest in developing “opportunity neighborhoods” that benefit all residents.

Economic Growth Experienced by Some Cities Does Not Benefit Some Residents

Traditional measures of economic vitality have been rooted in overall economic and job market growth measures, usually at the metropolitan statistical area (MSA) level.  However, for many residents living in high economic growth areas like Miami, Atlanta, and Dallas, not much of the MSA’s economic growth is benefiting residents born in these cities.  In fact, the National Center for Children in Poverty (NCCP) report that child poverty rates are some of the highest in cities experiencing the strongest economic growth rates.   One explanation of why is this occurring is that many cities are importing talent form other locations rather than developing local talent to share in the economic growth of their respective cities.

However, in contrast, there are some cities where economic growth and upward mobility of residents go hand and hand.  For example, residents born and raised in Denver, Seattle, and Huston neighborhoods are far more likely to experience higher social-economic upward mobility rates into adulthood.  Still, there are a unique group of cities (e.g., Boston, Pittsburgh, Minneapolis) that have experienced very little economic growth, yet their residents live in neighborhoods that produce higher than average economic mobility rates of children residing in various neighborhoods.  Even for children that move into “opportunity neighborhoods” at an early age experience higher upward mobility rates than those who remain in neighborhoods that limit upward mobility.

“Community philanthropy must invest in generating inter- and intra-neighborhood research that examines differences in upward mobility outcomes for children.”

What seems to matter most are the conditions in one’s own neighborhood, not large geographical areas or in cities.  Therefore, developing targeted neighborhood investment strategies and engaging neighborhood residents to learn more about these inter- and intra-neighborhood dynamics that support, or handicap upward mobility is critical to developing effective community investment strategies.


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