Looking beyond Data to Understand Economic Mobility
When living on the “wrong” side of a road can make a world of a difference, the proactive and hyper-local work of community development practitioners is essential for sparking change.
During Raj Chetty’s keynote speech at Policy Summit 2019 in Cincinnati, Ohio, a map of the host city filled a screen behind him, laden with shades of reds and blues. Areas shaded red indicated low-opportunity census tracts in Cincinnati, places in which children of low-income parents are most likely to live in low-income households as adults. Blue tracts offered a more optimistic story, as children in these neighborhoods generally earn more as adults than their counterparts in low-opportunity tracts. Chetty’s map begged a perplexing question, one that underpins the complexity of community development: How can a low-opportunity census tract border another for which escaping poverty is considerably more realistic? At the national level, Chetty’s map (which can be found at opportunityatlas.org) portrays Cincinnati as a city of average economic opportunity. At a more granular level, census tract data shows that just one or two streets can separate high- and low-opportunity neighborhoods. “You can go a couple miles down the road in Cincinnati and it’s like you’re going from Alabama to Iowa in terms of upward mobility,” Chetty said. “So, the story here is not fundamentally one about different regions or even one about different cities in a region. It’s about different blocks, really—different neighborhoods across cities within a region.”
Chetty’s research provides extraordinary insight into where Americans have the lowest probability of climbing the proverbial socioeconomic ladder, but data is limited in its ability to explain why block-by-block variations in opportunity persist. For example, consider the Ludlow neighborhood in Shaker Heights, a suburb of Cleveland: Chetty’s Opportunity Atlas shows that the average black child from Ludlow with low-income parents grows up to earn around $23,000—the national median for similar children—but black children in neighboring tracts can see household incomes as low as $17,000 as adults.
Ludlow’s relative success compared to neighboring communities is no accident. In 2019, website FiveThirtyEight released an article, “A Tale for Two Suburbs,” which partly detailed Ludlow, a community rocked by racially charged acts of violence in the early 20th century. Author Clare Malone writes that Ludlow residents collectively launched the Ludlow Community Association (LCA) in an effort to prevent an exodus of white residents from the neighborhood as black families moved in. During a time when lenders redlined black neighborhoods and locked them out of crucial investments, white flight left behind opportunity deserts for minority residents.
The LCA’s efforts spilled over into the rest of Shaker Heights, and the suburb notably shifted its focus toward progressive policies aimed at racial integration. Chetty’s Opportunity Atlas displays Shaker Heights as a blue bastion of opportunity for low-income black families. As Malone notes in her FiveThirtyEight article, Shaker Heights’ efforts contrasted that of Parma, a suburb which actively tried to prevent black residents from moving in during the mid-20th century. Today, most of Parma is shaded gray and labeled “Insufficient Data” on the Opportunity Atlas because too few low-income black families live in the suburb’s tracts. As Chetty noted in his keynote, understanding why suburbs such as Parma and Shaker Heights diverged in terms of opportunity for low-income residents—particularly minority residents, in this case—is vital in crafting effective policies for inclusive development.
“You start out from the concept of the American Dream … as a very big-picture, national thing, and I think the roots of that issue really emerge incredibly locally,” Chetty said. “We come down to the city block level and see that it really matters which side of the street you live on, perhaps because of the way we’ve implemented affordable housing policies or tried to do community development.”
Without context, even extraordinary data isn’t enough to spark change. When living on the “wrong” side of a road can make a world of a difference, the work of community development practitioners on the ground—like the Ludlow Community Association—is necessary to shift the hues of Chetty’s map from red to blue.
The views expressed in this report are those of the author(s) and are not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.