Study: County of residence affects children's future incomes

Wednesday, June 17, 2015

Barry County ranks at better than 72 percent of counties nationwide

According to a recent article from the publication, TheUpshot, county in which a child grows up is related to how successful that child will be, specifically including much they will earn as young adults.

In an article entitled, "The Best and Worst Places to Grow Up: How Your Area Compares," a study found that children who grow up in some places go on to earn much more than they would if they grew up somewhere else.

Barry County was found to be one of the better counties for helping poor children go up the income ladder, the article said. It ranks 1,785th out of 2,478 counties, better than about 72 percent of counties. And, it ranks better for poor children than it does for rich children. The data also suggested that if a child is poor and lives in the Aurora area, it's better to be in Barry County than Stone or Taney County. And, the younger a child is are when moving to Barry County, the better the child will do, on average. Children who move at earlier ages are less likely to become single parents, more likely to go to college, and more likely to earn more, the study found.

The data suggested that every year a poor child spends in Barry County adds about $100 to his or her annual household income at age 26, compared with a childhood spent in the average American county. Over the course of childhood, which is up to age 20 for the purposes of the study, the difference adds up to about $2,100, or 8 percent, more in average income as a young adult.

These findings, particularly those that show how much each additional year matters, are from a new study by Raj Chetty and Nathaniel Hendren, and have huge consequences on how we think about poverty and mobility in the United States. The two men, who are economists at Harvard, have been known for their work on income mobility, but the latest findings go further. Now, the researchers are no longer confined to talking about which counties correlate well with income mobility; new information suggests some places actually cause it.

Across the country, the researchers found five factors associated with strong upward mobility: less segregation by income and race, lower levels of income inequality, better schools, lower rates of violent crime and a larger share of two-parent households. In general, the effects of place are sharper for boys than for girls, and for lower-income children, than for rich.

"The broader lesson of our analysis is that social mobility should be tackled at a local level," Chetty and Hendren said.

To remove variation that was caused by different types of people living in different areas, Chetty and Hendren based the latest estimates on the incomes of more than five million children who moved between areas when they were growing up in the 1980s and 1990s. These estimates are causal: They suggest moving a given child to a new area would in fact cause him or her to do better or worse.

For a family with a parent in his or her 40s, the 25th percentile corresponds to an annual income of about $30,000; the 50th percentile to about $60,000; the 75th percentile to about $100,000; and the top 1 percent to more than $500,000. Estimates are based on children born between 1980 and 1986, and their neighborhoods in the 1980s and 1990s.

Median rent is for $2,000, in 2012 dollars. At the 25th percentile, the margin of error for each of the county estimates is around $1,100. For more information on the research by Chetty and Hendren, people may Google the article, "The Impacts of Neighborhoods on Intergenerational Mobility.

Below is how much 20 years of childhood in Barry County adds or takes away from a child's income (compared with an average county), along with the national percentile ranking for each. For all poor children (boy or girl), gross income is +$2,080; for boys, +$1,730; and for girls, +$2,460. For all average-income children, +$1,650, for boys, +$1,300, for girls and +$2,060 gross. For all high-income children, +$1,050, for boys, +$740, for girls and +$1,450 gross.

For more information on the study, people may Google "The Best and Worst Places to Grow Up: How Your Area Compares," or go to http://www.equality-of-opportunity.org/. The study and article included input from Gregor Aisch, Eric Buth, Matthew Bloch, Amanda Cox and Kevin Quealy.

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