From time immemorial, social scientists have been trying to figure out what factors allow a child to escape poverty and grow up to be successful: nature, nurture, schooling, race, classmates, religion and dumb luck are among the factors they've considered. A study released Tuesday contends that a kid's upward mobility may depend at least partly on where he grows up.
Four economists — Raj Chetty and Nathaniel Hendren from Harvard and Patrick Kline and Emmanuel Saez of Berkeley (plus six researchers) — compiled statistics from millions of anonymous earnings records to measure intergenerational mobility. In a massive data crunch that hurts your head to think about, they examined families' pretax incomes and compared them to those of children born from 1980 to 1981. Then they calculated two mobility measures. The first was the likelihood that a child born in the bottom fifth of the income distribution could reach the top fifth. The second shows which percentile a kid born to a family earning $16,000 (the 10th percentile of income) is likely to wind up in.
The researchers calculated those measures for 741 "Commuting Zones," which are roughly analagous to metropolitan areas — although they also include rural areas. And, guess what? The climb from the bottom to the top of the income ladder happens much less frequently in the Southeast and the Rustbelt, while the highest rates of mobility occur in the Northeast, the West and — this is where we come in — the Great Plains.
The bottom-to-top mobility rate for the Twin Cities, for example, is 9 percent. That's lower than Boston (9.8 percent) and Seattle (10.4 percent), but a whole lot better than Atlanta (4 percent), Chicago (6.1 percent) or Detroit (5.1 percent). (And for you fellow Portland-resenters, they are a tick below us at 8.9 percent.) Surprisingly, upward mobility is relatively easy in rural areas like Fergus Falls (15.2 percent) and Grafton (21.7 percent), but I would think that's happening because the span of incomes from top to bottom is not as great as in wealthy metros.
What happens to the typical kid at the bottom? A child in the Twin Cities whose parents earned $16,000 is likely to rise to the 41st percentile; in Boston s/he will reach the 40th, in Atlanta 31st, in Seattle, also the 40th, in Chicago 34th and in Detroit 32nd. (If you're the type of person who likes to play with this stuff, I suggest you visit the New York Times, which has created some interactive graphics to show what's happening where.)
Looking for crucial factors
The investigators ran correlations to find what it was about particular places propels people upward. Racial composition didn't seem to have much effect; where mobility was low, it was low for both blacks and whites. They also looked at economic growth in each area and ruled it out at as major factor.
So what was ruled in? For one, "the progressivity of tax expenditures and state income taxes have the strongest correlations with intergenerational mobility," write the authors. Other factors: school quality, social capital — how easy it is to network with people who can help you out, and the percentage of two-parent households.
The factor that struck me, as someone who thinks about city planning, was the researchers' intimation that concentrated poverty and racial segregation, especially when coupled with a poor transit system, tended to correlate with lack of upward mobility.
One explanation for the Twin Cities' respectable (though not exceptional) score may be the increasing diversity of its suburbs. A nationwide study by Myron Orfield and Thomas Luce of the University of Minnesota Law School's Institute of Metropolitan Opportunity last year found growing racial diversity, particularly in mature suburbs.
"Diverse suburbs now represent the best hope for realizing the dream of equal opportunity," they wrote. Such places offer integrated schools, which, research has shown, boost academic achievement among non-whites but don't lower it for whites, increase graduation rates and send more minority students to college.
Diverse suburbs on the rise
In our neck of the woods, diverse suburbs, those with minority populations of 20 to 60 percenta, are on the rise. Among suburbs with the largest share of minorities: Bloomington (23 percent minority), Brooklyn Park (50 percent), Eagan (21 percent) and Woodbury (21 percent). In a report presented to the Community Development Committee of the Metropolitan Council two weeks ago, Orfield declared that such racially integrated communities "offer the best chance to eliminate racial disparities in economic opportunity.
But there is concern about the continuing health of diverse suburbs. Orfield fears that racial steering by real-estate brokers, mortgage redlining (denying minorities mortgages or charging them more) and the clumping of affordable-housing developments in areas that are already struggling could "tip" integrated areas into becoming newly segregated pockets. When that happens, upper-income residents and businesses pull out, leaving the town with fewer resources and more problems.
Minnesota housing low income housing tax credit applications
Selections and non-selections in the Twin Cities metro 2006-2012 tax credits
Source: Minnesota Housing analysis of housing tax credit applications 2006-2012. Includes TCAP and 1602 but excludes round 2 of 2012.
Right now, it's difficult to know the extent of racial steering, an illegal practice in which real-estate brokers systematically editorialize about specific neighborhoods, prodding blacks and whites to stay where they'll feel "comfortable." Nobody I talked to could clearly remember the last study that had been done — at least in the Twin Cities.
Jaimie Verbrugge, city manager of the diverse suburb of Brooklyn Park, says steering is occurring there. And, predatory lending (which led buyers into mortgage deals that were packed with unnecessary fees and high interest rates) aimed at Brooklyn Park and Brooklyn Center residents produced one the highest rates of foreclosure in the state, affecting one in five homes.
Where affordable housing aid goes
The clumping of affordable housing aid in areas that already have a lot of it is another concern. The fact that the Met Council ties certain kinds of aid to the community's willingness to accept more affordable (or low-income) housing ends with diverse communities like his own "carrying more than our fair share." He adds that a great deal of market-rate housing in Brooklyn Park is "affordable, but we are not getting credit for what we already have."
Orfield claims that between, 2005 and 2011, the Minnesota Housing Finance agency set criteria that resulted in the building of 1,200 units in segregated areas of the central cities with lousy schools. And it rejected $32,000,000 worth of projects in suburbs with better schools.
Disputing his contention is Mary Tingerthal, commissioner of the Minnesota Housing Finance Agency. It's up to her to administer the allocation of low-income housing tax credits, which are the financial vehicle used to produce new affordable housing. After giving me a lecture (badly needed) on the history of subsidized housing in the U.S., she explained that the tax credits are handed to developers under a QAP or Qualified Allocation Plan, which assesses projects on five different criteria, among them access to jobs and housing, incidence of foreclosure "to replace housing that was lost," she says, high-poverty census tracts (although she argues that that only garners one point); areas of transit priority, for example, places near the coming Southwest LRT and the North Star train line.
"High poverty areas do not necessarily get the most," she says. "We think our selection criteria are directing development of low-income housing away from segregated areas." In the Twin Cities, 77 percent of the developments selected by Minnesota Housing for tax credits are in the attendance areas of integrated or predominantly white schools.
Many 'selected' areas scattered among suburbs
For evidence, she sent me a map of the seven-county area showing where projects had been selected and rejected for low-income housing tax credits from 2006 to 2012. It showed a concentration of blue "rejection" squares in Minneapolis and St. Paul, while many of the red "selected" blobs were scattered among suburbs — though many in those diverse inner-ring suburbs.
It's good to know that Minnesota Housing is on the case. The Met Council is another story. Gary Cunningham, chair of the Community Development Committee, says that he'd been advised that the Council's only role was as a "bully pulpit" with a goal of guiding and not mandating. If so — and there's some thought that as administrator of various federal programs the Council does have an affirmative duty not to perpetuate segregation — that would be a shame. The new Harvard-Berkeley study has suggested that abolishing pockets of poverty may strongly influence how easily young people can rise out of poverty. To make sure that happens, we'll need every hand on deck.
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