Over the last four decades, the financial circumstances into which children have been born have increasingly determined where they have ended up as adults. But an expansive new study, based on billions of social media connections, has uncovered a powerful exception to that pattern that helps explain why certain places offer a path out of poverty.
For poor children, living in an area where people have more friendships that cut across class lines significantly increases how much they earn in adulthood, the new research found.
Previously, it was clear that some neighborhoods were much better than others at removing barriers to climbing the income ladder, but it wasn’t clear why. The new analysis — the biggest of its kind — found the degree to which the rich and poor were connected explained why a neighborhood’s children did better later in life, more than any other factor.
The effect was profound. The study found that if poor children grew up in neighborhoods where 70 percent of their friends were wealthy — the typical rate of friendship for higher-income children — it would increase their future incomes by 20 percent, on average.
These cross-class friendships — what the researchers called economic connectedness — had a stronger impact than school quality, family structure, job availability or a community’s racial composition. The people you know, the study suggests, open up opportunities, and the growing class divide in the United States closes them off. [Continue reading…]