The Importance of Place

From William Whyte to Raj Chetty

by Anise Vance

This is the third in a series of pieces on opportunity, income inequality, and economic mobility. Complementing The Boston Foundation’s Opportunity Forums, and its year-long effort to highlight income inequality, this series will touch on a wide variety of research and topics pertaining to economic mobility. For more on the Opportunity Forums, please visit: www.tbf.org/opportunity.

In February 1937, William Whyte moved into Boston’s North End. The twenty-three year old Anglo-Saxon Harvard fellow was an outsider by ethnicity, class, and educational attainment in the predominantly Italian neighborhood. Whyte, however, quickly learned Italian and diligently cultivated relationships with community members. Gradually, he uncovered the values, systems, and institutions that made the North End unique. By July 1940, Whyte had written a first draft of what would become a foundational text in urban ethnography, Street Corner Society.

Street Corner Society was significant to its era’s social scientists for a number of reasons. As an urban ethnography, it charted methodological territory that few American urbanists had previously explored. As a study that demonstrated the complexity of immigrant life and societal sub-structures, it refuted common ethnic stereotypes that saw Italian-Americans as irrational, lazy, and dangerous. Lastly, and importantly, it offered analysis that was, at its core, place-based. The particularities of the North End, and its effects on those who resided in it, were Whyte’s central concern.

Few would have imagined that Whyte’s work would find resonance in that of a 21st century economist focused more on quantitative analysis than Whyte’s immersive qualitative approach. Nevertheless, Raj Chetty’s recent work on economic mobility carries in it the same conviction inherent to Whyte’s seminal study: where we live matters.

Chetty, in an ongoing project termed The Equality of Opportunity, analyzes the relationship between place and economic mobility. The project’s first phase “presented statistics on how upward mobility varies across areas of the U.S.” More specifically, the project measured the odds of someone born into the the bottom economic quintile rising to the top quintile. Among the nation’s 50 largest metro areas, Boston ranked 7th. That achievement, however, was tempered by the non-relative reality of data: ranking 7th still meant the odds of reaching the top quintile from the bottom were only 10.5%.

In its second, and current, phase, The Equality of Opportunity project focuses “on families who moved across areas to study how neighborhoods affect upward mobility.” While the project’s first phase revealed a clear correlation between place and economic mobility, the second aims at uncovering causal links. Its animating questions are both simple and profound: holding for individual and familial socioeconomic variables, does living in a particular area increase or decrease one’s future earnings? And, importantly, why? As Justin Wolfers, an economist at the University of Michigan wrote, “Hundreds of studies have demonstrated that the odds of economic success vary across neighborhoods. The far more difficult question is whether that’s because neighborhoods nurture success (or failure), or whether they just attract those who would succeed (or fail) anyway.”

Chetty’s findings returned an unambiguous response. Neighborhoods, cities, and counties can, and do, both negatively and positively affect their residents’ future earnings. Using Justin Wolfers’ words, neighborhoods themselves nurture success or failure.

The findings on Suffolk County were not encouraging. Better than only 25% of other counties, Suffolk County’s children can expect to lose up $840 of their future annual income, depending on how many years they have lived in the county. Poor kids and girls across the economic spectrum are the most adversely affected children.

The news is no less disturbing when Suffolk County is compared to surrounding areas. Each of its adjacent counties offers children greater economic mobility. Of the adjacent counties, only Essex County has a negative influence on future annual income. Norfolk and Middlesex counties offer their children the greatest degree of economic mobility, adding $2,820 and $1,700 (respectively) to kids’ future annual income.

The evidence is clear. Place matters and it matters greatly. Raj Chetty and his research partner, Nathaniel Hendren, note their work’s key takeaway is that “social mobility should be tackled at the local level.” What, then, are the features of successful localities? What systems and institutions can neighborhoods, cities, and counties strengthen to generate greater opportunity? It is to these questions that our Opportunity Series now turns.