Poor children with rich friends earn much more in adulthood, study shows

Poor kids who have rich friends earn 20 percent more as adults than if they just grew up with other people with the same wealth, a study by Harvard scientists found.

The social environment of a person as a child has a formative role in their schooling and their decisions. The researchers used complex Facebook data to see how their friends’ financial situation affected their adult salaries.

They invented a term called “economic connectedness” to quantify how wealthy a person’s friendship group is.

They found this metric to be crucial for predicting upward income mobility.

Adult income will increase by a fifth

The researchers found that if a child with low socioeconomic status grew up around people with high socioeconomic status, their adult income would increase by one-fifth.

“These data show the importance of social capital for the road out of poverty. Associations between individuals with low and high SES can influence aspirations, access to information and employment opportunities,” said Dartmouth College Oxford academics Noam Angrist and Bruce Sacerdote, who were not involved in the study.

In a second article, the Harvard researchers examined what affects economic connectedness and found that half of social division is due to class segregation, while the remainder is due to “friendly bias” in people make friends more easily with like-minded class.

dr Raj Chetty, lead author of the Harvard study, said a lack of exposure, which prevents economic connectedness and hence income mobility, is a big problem.

Improve cross-class mixing

Improving the mix between classes in schools through changing admission criteria and new initiatives is one way to enable greater economic connectivity both inside and outside of schools, said Dr. chetty

“A reasonable next step is to expand Chetty and his colleagues’ monumental data production and analysis to countries outside the United States,” added Dr. Angry and Dr. Add sacerdote.

“With global data, questions can be examined, such as whether economic networking is more or less crucial for mobility in more equal societies.”

The two research papers were published in Nature. Poor children with rich friends earn much more in adulthood, study shows

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