Which side of the tracks a child grows up in Allen County greatly impacts that child’s future income.
Compared to national averages, the poor will likely be poorer and the rich richer, according to a recently released Harvard University study.
Allen County children in the 25th percentile of the national income distribution, which the study pegs at roughly $30,000 per household, as adults have a household income approximately 6.6 percent lower than the national average, the study’s data shows. That works out to a loss of 0.33 percent for each year of living in the county from birth to age 20.
But children with families in the 75th income percentile saw a positive effect. Their incomes increased by 0.24 percent each year they lived in the county from birth to age 20, bringing them about 4.8 percent higher than the national average.
The Harvard study indicates different elements within neighborhoods combine to affect income mobility for youths. Research focused on identifying those causes to demonstrate how quality of place can influence a child’s economic opportunities.
“What we do see is potentially actionable ideas,” said Jeremy Majerovitz, a pre-doctoral fellow with Harvard’s Equality of Opportunity Project. “Places that are economically and racially segregated are worse for low-income kids.”
The nationwide analysis examined figures from tax records of families of more than 5-million children who moved to different counties between 1996-2012. Researchers found children who moved to a place with better qualities of life tended to have higher incomes later in life. Places with poorer qualities of life resulted in lower incomes.
A child’s age also influenced the strength of the impact. Young children saw outcomes improve proportionally for each year they lived in a better environment. The impact diminished when children moved to better environments at older ages.
“The neighborhood environment during childhood is a key determinant of a child’s long-term success,” the study says. “This suggests that policy makers seeking to improve (economic) mobility should focus on improving childhood environments … and not just the strength of the local labor market or availability of jobs.”
Multiple factors influence a child’s economic mobility in a community, including education, crime, family and opportunities.
Integration is a key and difficult element to Jonathan Ray, president and CEO of the Fort Wayne Urban League. A person must be able to fit in to a community or neighborhood to be successful.
“I don’t think Fort Wayne is one that’s very inviting for strangers,” Ray said.
A person who leaves a lower-income area for a more affluent one may have more access to resources, but if they can’t integrate into that place, their economic mobility might be muted.
“If you’re not integrated into the neighborhood, I’m not sure if there’s an impact,” he said. “If you’re totally integrated into the strength of a neighborhood, it’s going to have a bigger impact.”
Community segregation and income inequality are also huge elements.
“These variables about segregation are probably the strongest indicators,” Majerovitz said.
Allen County’s income gap in 2014 widened to about 45 percent on the Gini index, according to U.S. Census American Community Survey data provided by the Community Research Institute Indiana University-Purdue University Fort Wayne. The index measures income distributions where zero is total equality and 100 percent equals total inequality.
While the county’s Gini score remains below the nation’s at about 48 percent, it has accelerated and moved slightly above Indiana’s score.
“Allen County’s Gini has been rising faster than the state and nation. Since 2010, Allen County has increased 4.14 percent while the nation has increased 1.93 percent and the state 2.53 percent,” said Valerie Richardson, a research associate with CRI. “We are working with small numbers, and there are statistical errors, but I don’t think we should ignore this trend.”
Household incomes at the 80th percentile outweigh incomes at the 20th percentile four to one locally, ACS data shows. Among families with children under 18 years old, an estimated 19 percent fell below the poverty level.
Most poverty in the county is concentrated on Fort Wayne’s south and southeast sides, Indiana Business Research Center data mapping shows. Those areas also have dense populations of black, Latino and Asian residents, according to a corresponding map of racial demographics from the Weldon Cooper Center for Public Service at the University of Virginia.
“It’s very important that poverty does not become concentrated,” said Steve Hoffman, president and CEO of Brightpoint in Fort Wayne.
The southeast side remains segregated by a lack of accessible routes to other areas of the city as well as by economic racism, Tim Hallman said. White-owned businesses tend to undermine minority-owned businesses for competitive advantages.
“They wouldn’t label it as racism, but what else would you call it?” said Hallman, a neighborhood leader.
Such activity prevents minority entrepreneurs from developing local businesses, which hurts economic development on the southeast side, he believes.
“Jobs bring dignity, jobs bring respect, jobs bring independence,” he said. “Who’s going to break the logjam?”
Family makeup is another top factor influencing a child’s future economic mobility. Communities with more two-parent households have more positive outcomes than those with large shares of single-parent homes, according to the Harvard study.
Low-income, single parents have to work harder and longer to remain self-sufficient, which leads to stress, weariness, and lost time to spend with their children. But the issue isn’t limited to only single parents, Hoffman said.
“It takes time to be poor. It takes time to work to be self-sufficient,” Hoffman said. “It’s much more difficult for a single-parent household, but any family type that’s really struggling to meet their basic needs, that really has a negative impact on childhood development.”
About 13,000 single mothers with children under 18 years old reside in Allen County and, of them, nearly 41 percent live below the poverty level, ACS data shows.
The Harvard study paints a broad picture of social mobility as a resource for addressing inherent issues at local levels. A companion report suggests giving families subsidized government vouchers to move from an impoverished area to a similar living situation in an area with less poverty. The vouchers can significantly improve a child’s income potential, the study argues.
The report applied the neighborhood mobility research to results from the U.S. Department of Housing and Urban Development’s Moving to Opportunity experiment in which moving vouchers were provided to about 4,600 families in five large cities during the 1990s.
“Our findings suggest that efforts to integrate disadvantaged families into mixed-income communities are likely to reduce the persistence of poverty across generations,” the report says.
Brightpoint’s services include working to keep at-risk neighborhoods from slipping into poverty and providing resources to help disadvantaged parents spend more time with their children.
Encouraging better integration is also a start.
Hallman believes neighborhoods with predominately white residents could be more welcoming of minorities.
At the same time, people moving from one area to another have to assert themselves more to make integration happen, said Ray.
“It’s on the individual to find a path that’s going to help them achieve,” Ray said.
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By comparison, the county’s impact on income mobility for children in the 25th percentile falls between other counties of similar size, with populations between 354,000-361,000, in the nation’s interior.
Washtenaw County, Mich. can drive incomes to 10-percent lower than the national average, and Hamilton County, Tenn. has an effect of negative 9.4 percent. On the other side, Lehigh County, Penn.’s impact is negative 3 percent, while Westmoreland County, Penn. has a positive effect, which can raise incomes to 7.4 percent higher than the average.