Economic Mobility in Philadelphia

How important was the neighborhood you grew up in?

Opportunity Insights, led by Dr. Raj Chetty, has codified intergenerational mobility in the United States. By leveraging IRS tax returns from the 1980’s and linking them to a child’s future income 30 years later, we can now understand how strong the developmental environment is on future economic outcomes for children. Long story short — most America’s wealthiest earners were born to affluent households.

While the American Dream is still possible, i.e. being born poor and amassing wealth throughout life, it has become much more difficult over the past 40 years. In 1940, children had a 90% chance of out earning their parents. By 1980, that rate had fallen to 50% (Chetty et. al., 2016).

Dr. Chetty’s research has large implications for our country. While we’ve all suffered from declining prosperity, the middle class has seen the largest fall in mobility. His research found that national changes in intergenerational mobility have variated by parental income, race, gender, and neighborhood.

I sought to examine mobility in the greater Philadelphia metro area. For simplicity, I looked at all genders, parental wealth, and races — focusing solely on unique neighborhood characteristics at the census tract-level. What I found will not surprise most who are familiar with Philadelphia. The majority of the city, especially North and West Philadelphia, are devoid of economic opportunity — children born in the 1980’s have gone on to earn $17k…