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The value of the neighborhood

When it comes to a child's economic future, a new study indicates that where they come from is the key factor in deciding where they're going.

August 01, 2009

Forget the old nature-versus-nurture paradigm and which matters most in shaping a child's future prosperity. According to a new study by the Pew Charitable Trusts, it's not family socialization and conditions at home but the level of poverty in a neighborhood that is the strongest determinant of a child's future economic stability. The study, released this week, concludes that neither parental income nor educational level, employment nor marital status are primary factors in whether children from middle-class households one day earn as much or more than their parents or fall down the income ladder.

The nonprofit Pew Charitable Trusts began researching the impact of neighborhood on income mobility after an earlier study revealed puzzling gaps between the children of middle-class blacks and those of middle-class whites. Of the 45% of African American children raised in middle-class homes, half earned less than their parents over a generation. The most recent study tracked more than 5,000 families since 1968 and found that half of black children born between 1955 and 1970 in families with incomes of $62,000 or higher in today's dollars grew up in high-poverty neighborhoods. By contrast, only 1% of white middle-class children grew up in high-poverty communities.

On closer examination, the statistics aren't that surprising. Numerous studies have examined how past racial segregation and housing discrimination created high-poverty neighborhoods that became self-perpetuating. Other research, however, gives reason for hope that the cycle can be broken. Although housing discrimination persists, it dropped significantly during the 1990s, according to the Urban Institute. For example, in 2000, 83% of black home-buyers said they did not experience discrimination, a significant improvement over the 71% who said they had in 1989. The improvement indicates that middle-class blacks today have more choice in where to live than those in the 20th century.

The findings also suggest that the Obama administration's plan to target 20 high-poverty neighborhoods and create a network of services is more likely to improve conditions for entire communities than previous, more piecemeal approaches. Modeling its "promise neighborhoods" on the Harlem Children's Zone, a nonprofit agency that runs a network of educational, health and social services, the administration will roll out its program in 2010.

The Pew study suggests that even a small improvement matters. Black children who grew up in neighborhoods where poverty fell by 10% had higher incomes as adults than those from neighborhoods where the poverty rate remained the same. The old proverb, "It takes a village to raise a child," is true. But the village has to be a healthy one for the child to have a chance.

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