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What’s good for poor kids isn’t bad for rich ones

Image courtesy of Flickr user <a href="">Patrik Nygren</a> under a Creative Commons license.

Much of the discussion around last week's big new social mobility study  focused on the fates of poor kids. We now know, thanks to the work of Harvard economists Raj Chetty and Nathaniel Hendren, that some places in America (Baltimore, Detroit, Orlando, Chicago) offer particularly problematic environments for low-income children to grow up if we want them to have economic opportunity as adults.

We know something about the structure of those places — they're highly segregated and unequal. They tend to have higher crime and worse schools. And they're more likely to have a lot of single-parent families. We also now know that poor children might have better odds if they moved — especially at a young age — to places with more economic mobility (Fairfax County, Va.; Bergen County, N.J.; Seattle).

This same research, though, based on data about more than 5 million families across the country, tells us something about rich kids, too.

A boy from wealthy parents (who earn in the 75th percentile nationally) is also much better off growing up in Fairfax County than if he grew up somewhere in average America. If he spends his entire childhood there, Chetty and Hendren estimate, he stands to earn nearly 17 percent more at age 26 than he would had he grown up in, say, Warren County, Kentucky.

Effectively, Fairfax County is a good place to grow up for both rich and poor kids. And this is an important, little-noticed takeaway in this big study with a lot of other bold-faced findings.

"Places that generate better outcomes for kids in low-income families do not on average generate worse outcomes for kids in high-income families," Chetty says.

This matters because it suggests that helping poor kids won't harm rich kids. And one common obstacle to anti-poverty programs is the fear that it will. We often worry that high-achieving children will be worse off if we put struggling, lower-income kids in their classrooms. We worry that good schools can't survive greater racial and economic diversity. We fret that "nice" neighborhoods won't be all that nice any more if they have poor families living there, too.

This fear treats opportunity as zero-sum — if we try to create more of it for poor kids, we have to yank some away from wealthier ones.

"We don’t see that pattern in the data," Chetty says.

Bergen County, N.J., outside New York City, is a great place for poor kids (on average, they'll earn about 14 percent more at age 26 thanks to the causal effects of growing up there). It's also a great place for rich kids (they'll earn about 7 percent more). Same for Hudson County, N.J. And Minneapolis. And Cedar County, Iowa.

Step back, and this isn't actually all that surprising. Poor kids and rich kids need a lot of the same things: high-quality schools, healthy neighborhoods, stable homes. What's good for one is good for the other.

"There are two questions one could ask," Hendren says. "One is to what extent are places that are good for poor kids also good for rich kids? And if you send poor kids to places where the rich kids are doing well, will it harm the rich kids? We don’t have an answer to the second question, but we have an answer to the first."

He and Chetty can't say what would happen in some hypothetical and dramatic social engineering experiment where everyone in America moved around until we were perfectly integrated and equally diverse. But it seems likely the answers to Hendren's two questions are linked.