How Place Determines Opportunity

Though population has generally flowed from low- to high-income states, leading to better employment opportunities and higher per capita income in a region, in the past two decades, access to high-productivity regions has been accompanied by declines in worker mobility and increasing housing affordability barriers. New high-productivity jobs are located in metropolitan areas with higher housing costs that attract high-skilled workers, forcing lower-skilled workers into lower-opportunity regions. City revitalization and the resulting gentrification is driven by educated, young people who prefer to be centrally located for proximity to their jobs. In their new study, Arthur Acolin and Susan Watcher analyze these new trends and look at how access to housing affects people’s access to opportunity, including education and good jobs. They studied this relationship using decennial census data from 2000 and American Community Survey data from 2006 and 2014 at the metropolitan-area level. Their findings show that these newer patterns have important implications for future economic mobility and social inclusion in cities.

Key findings

• Metropolitan areas that experienced above-average employment growth also experienced faster than nominal rent and house price growth.
• Areas with above-average employment growth from 2000 to 2014 disproportionately experienced increases in residents with a bachelor’s degree relative to residents without one.
• In low- and high-growth regions, rents and housing prices are increasing faster than income.
• The need for access to good jobs in central locations that is driving the lack of affordable housing shows that access to housing and access to opportunity are inextricably linked, which affects future intergenerational mobility. Policies need to address this issue by increasing affordable housing in opportunity areas.

Photo by JDWFoto/Shutterstock.