Indicator: Neighborhood economic diversity
Definition
The concentration of poverty within a city or county
RECOMMENDED METRIC(S)
Percentage of city or county residents experiencing poverty who live in a high-poverty neighborhood (defined as a neighborhood in which more than 40 percent of residents experience poverty)
Type(s) of Data Needed
Administrative dataWhy it matters
Students and families in lower-income neighborhoods tend to have less access to educational resources, support networks, and job opportunities that promote economic mobility. The size of the middle class in an area is highly correlated with levels of upward mobility, and moving to a lower-poverty area before age 13 improves the likelihood of students eventually attending college and earning more in adulthood. Yet economic segregation varies by race—for example, 80 percent of Black people from low-income households and 75 percent of Latino people from low-income households live in communities the federal government considers to be “low income,” based on the concentration of poverty in the neighborhood. In contrast, about half of White people from low-income households live in a low-income community.
What to know about measurement
The data required to compute the proposed metric are available annually from the American Community Survey. An alternative metric is the share of middle-class households in a locality, defined as the percentage of families between the 25th and 75th percentiles of income.
Framework users interested in measuring connections between economically diverse people can also refer to the Opportunity Insights Social Capital Atlas. The tool includes interactive data on economic connectedness at multiple levels, including (but not limited to) state, region, county, and zip code. Economic connectedness is defined as the share of above-median income friends among people with below-median incomes, and the data available through Opportunity Insights are based on analyses of social network data. Research has demonstrated a strong positive relationship between economic connectedness and upward income mobility. Framework users might also consider referring to the Child Opportunity Index, a set of publicly available composite metrics including 44 indicators across three domains, including a Social & Economic domain. Although the domain has some overlap with other framework indicators (such as access to affordable housing), it can offer a resource for framework users interested in a more holistic picture of socioeconomic opportunity.
E-W Case Studies
Source frameworks
This indicator appeared in five source frameworks reviewed for this report. Our proposed metric aligns with the Urban Institute’s Boosting Upward Mobility Framework’s indicator of economic inclusion.
References
The framework's recommendations are based on syntheses of existing research. Please see the framework report for a list of works cited.