Where You Grow Up Matters
By Albert B. Kelly
I have mixed emotions about the digital revolution and big
data. Even as we’re being monetized, quantified, and surveilled; we also have
access to insights about issues and people that we couldn’t have had a
generation ago. This became apparent while thumbing through the August issue of
Atlantic magazine with an article by
Gareth Cook on economist Raj Chetty who, in collaboration with Harvard
University, created the Opportunity Insights Institute.
If you’re not familiar with Opportunity Insights ( https://opportunityinsights.org) and
the Opportunity Atlas ( https://www.opportunityatlas.org),
it is an interactive tool that shows, among other things, that people’s
financial prospects later in life are very much determined by where they were raised
as kids. The atlas drills down to the level of census tract data going back
three decades.
The atlas was created using anonymized data on 20 million
Americans who are now adults in their mid-thirties and maps them back to the
Census tracts they grew up in. From there, the atlas estimates these adult
children’s average earnings, incarceration rates and other outcomes by their
parental income level, race, and gender in each of the country’s 70,000 census
tracts. What researchers discovered is how neighborhoods shape children’s
futures. So much so, that kids who grow up only a few miles apart in households
with roughly the same income often have very different outcomes as adults.
The atlas is color-coded with red showing where these adult children
(now in their 30’s) made out the worst with orange, yellow, and green showing
the middle of the road and blue showing where kids had the best shot at upward
mobility. One look at the atlas and it doesn’t take long to figure out that
there’s far too much red in parts of Cumberland County
Even as we absorb the Opportunity Atlas and what it can tell
us, I’m hoping that federal initiatives like the Opportunity Zones program,
meant to encourage investment of capital in low-income census tracts (read
neighborhoods) by offering investors deferred taxes on previous investments for
up to a decade if they reinvest their capital gains into designated census
tracts, might start to change outcomes in Cumberland County’s five zones.
For the record, in Bridgeton, the census tracts in the
Opportunity Zones program are 205.3 and 201. The median household income for
those who grew up in these census tracts is $22k and $25k respectively. In
1990, the median household income for census tract 205.3 was $24k and in census
tract 201 it was $27k. The difference isn’t dramatic but the trend is the wrong
direction.
Vineland’s two participating census tracts for the
Opportunity Zones program are 405 and 411. The median household income for
those growing up in these two census tracts are $33k and $26k. In 1990, the
median household income for these census tracts was $43k and $35k. Millville
has one participating census tract (301) and the median household income today
is $36k versus $39k in 1990.
Given the loss of the manufacturing base over the past several
decades through offshoring, outsourcing, and automation, I don’t think these
numbers come as a surprise but they do serve to underscore how the fate of one
generation impacts the next and it also highlights how important programs like Opportunity
Zones can be in halting and reversing these generational trends.
Space doesn’t allow me to do justice to the data contained
in the Opportunity Atlas which includes everything from incarceration rates and
employment rates to spousal and parental income down to the census tract level.
But all of it provides a clear picture that demonstrates that where a child
grows up will have a huge impact on his or her future.
Relocating is one possibility as demonstrated in the “Moving
to Opportunity” experiment conducted by HUD which invited low-income families
in public housing to enter a lottery. The winners got housing vouchers to help
pay the rent outside of public housing while those not selected stayed in
public housing. Both groups were tracked for several years and it turns out
that the children whose families moved enjoy higher earnings than those whose
families stayed.
Yet, not everyone can relocate nor do they want to which means
that change has to be homegrown. For the sake of the next generation of
children, the hope is that policy makers will use the data offered by
Opportunity Insights and similar initiatives to help inform and shape the next
generation of programs and policies.