According to an article recently published in The Atlantic, a parent’s decision of where to live is the decision that will have the greatest impact on a child’s life. The decision has a significant impact on the child’s future income, whether the child is likely to earn an advanced degree, and other overall life outcomes.
The article, written by data scientist Seth Stephens-Davidowitz, relies in part on The Equality Of Opportunity Project, which was spearheaded by social scientist Raj Chetty. That project resulted in an interesting map showing the likelihood of a child’s upward economic mobility based on geographic location. In other words, the map indicates that a parent’s decision of where to live may increase (or decrease) a child’s chances of earning more money than his or her parents. Large metropolitan areas were shown to give a child a greater chance of earning more money than his or her parents. They found that the five best metropolitan areas are: Seattle; Minneapolis; Salt Lake City; Reading, Pennsylvania; and Madison, Wisconsin.
After drilling even further down into this data, the team was able to create The Opportunity Atlas, which allows anyone to find out how beneficial any specific neighborhood is expected to be for kids of different income levels, genders, and races. Based on this data, Stephens-Davidowitz concludes that approximately 25% of the overall effects of a parent are driven by the parent’s decision of where to live – substantially more than any other parenting decision.
The likely reason of these outcomes is role-model behavior. Three of the biggest predictors that a neighborhood will increase a child’s success are(1) the percent of households in which there are two parents, (2) the percent of residents who are college graduates, and (3) the percent of residents who return their census forms. In other words, if a neighborhood is full of adults who can act as role-models for children, then the children in that neighborhood are more likely to have positive outcomes later in life. Other studies performed by Chetty have shown that females who grow up in neighborhoods where other females hold patents are more likely to grow up to earn patents themselves, and Black boys who grow up in neighborhoods where there are many Black father role-models end up with better life-outcomes (even if the boys themselves do not have a Black father present).
On reflection, the conclusions of the studies seem obvious. If your child grows up surrounded by successful, stable, educated individuals, then that child him or herself is more likely to be successful, stable, and educated. However, tying the conclusions to the specific decision of where to live is one that parents often overlook. The results of the study reinforce the old adage that location is the single most important decision with respect to real estate.
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