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Economic Segregation within Communities Reduces Economic Mobility

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A new study published in the journal Economic Geography finds that economic segregation reduces economic mobility across generations among low-income households. Researchers measured the influence of parents’ and siblings’ incomes, as well as the median incomes of their neighbors, on individual earnings. The study found that growing up in poor, economically segregated neighborhoods consistently decreased children’s future earnings. In fact, the influence of neighborhood conditions was about two-thirds as strong as that of parental income. Growing up in an affluent neighborhood (compared to a poor neighborhood) adds at least $635,000 in estimated lifetime earnings, and growing up in an affluent neighborhood with higher earning parents adds about $910,000.