Last Updated May 5, 2015 5:55 PM EDT
Children of low-income families are most likely to succeed if they grow up in DuPage County, Illinois, while the opposite is true after a childhood spent in Baltimore.
"If we're interested in changing upward mobility, a key factor is childhood exposure. Every year spent living in a better neighborhood increases your chance of success," Raj Chetty, an economist at Harvard University, told a conference call Tuesday at which he highlighted the findings of two new studies that underline the costs of widening economic inequality in the U.S.
"One of the patterns we find is low-income families moving out of Manhattan to Queens, or Hudson County, New Jersey, children do better if they moved to these areas at younger ages." Chetty said that means "We can actually, through policy, meaningfully influence where people live."
He advocated devoting more resources to vouchers that help low-income people pay rent wherever they choose to live, presumably in better neighborhoods, as opposed putting them in public housing, often in depressed neighborhoods. "We estimate the cost of vouchers relative to public housing is negative, since the higher taxes that kids pay over their lives by earning more more than offset the cost of the voucher relative to public housing," Chetty said.
Nearly 4 million children live in families that receive federal rental assistance, according to the Center on Budget and Policy Priorities, a liberal-leaning think tank. In 2010, just 15 percent of children in families receiving rent subsidies through the Department of Housing and Urban Development (HUD) lived in low-poverty neighborhoods, but 18 percent lived in neighborhoods where poverty was extreme.
"HUD has long believed that concentrated poverty helps to perpetuate patterns of segregation and a lifetime of lost opportunities for residents in high-poverty neighborhoods," HUD Secretary Julián Castro said in a statement.
The $25 billion now spent on subsidizing housing voucher programs should be targeted to encourage families to move to lower-poverty neighborhoods, and the assistance should target families with young children, the economist said. Families must often get on a waiting list to obtain a voucher, which runs counter to the goal of helping children at the youngest age possible, Chetty added.
The research released late Monday identified the best and worst of the 100 largest counties in the U.S. in terms of their causal effects on intergenerational mobility, with DuPage County, Illinois, the highest ranking. Growing up in DuPage County from birth, or having 20 years of exposure to that environment, "would raise a child's earnings by 16 percent relative to the national average," one of the reports concludes.
In contrast, every year spent in Baltimore cuts a child's earnings by 0.7 percent, creating an overall earnings penalty of approximately 14 percent for children born and raised in the city. "You need to move kids out of difficult environments when they are young," Chetty said.
Mecklenburg, North Carolina, was the second-worst large county for income mobility for poor kids, followed by Hillsborogh, Florida; Orange, Florida; and Cook, Illinois.
After DuPage, Illinois, Snohomish, Washington, ranked second as best large county for income mobility for poor children, followed by Bergen, New Jersey; Bucks, Pennsylvania; and Contra Costa, California.
"There's no benefits to moving adults to lower-poverty areas, so it's critical to focus on children," Chetty said. "Every year helps, no matter what age. Our data show even if you move at 10, 11 or 12, it continues to help, so we don't want to focus only on interventions before five."
One of the studies looked at poor families who used housing vouchers to relocate from public housing developments in extreme-poverty neighborhoods to lower-poverty neighborhoods. Those younger than 13 when their families moved earned 31 percent more -- or nearly $3,500 a year -- as young adults than those whose families did not get a Moving to Opportunity Demonstration voucher.
The second study tracked more than 5 million lower-income families who moved across county lines. It found significantly more college education, less teenage pregnancy and higher incomes for the children in families who moved to better areas.