Children who grew up in low-income households but made friends with children from higher-income homes are more likely to earn more in adulthood than those with fewer rich friends. Researchers argue that a person's social circle as a child has a formative role in their schooling and choices in life.
A study on Facebook connections titled "Social capital I: measurement and associations with economic mobility," published in Nature, showed that it has significantly affected adult income. The team created the term "economic connectedness" to quantify how rich a friendship group a person has, which they found is pivotal in predicting upward income mobility.
The Facebook Study
Raj Chetty at Harvard University said that there were speculations that an individual's access to social capital, social networks, and the community they live in a matter a lot for a child to have a chance to rise out of poverty. To prove this, New Scientist reported that he and his colleagues analyzed anonymous Facebook data from 72.2 million people in the US between the ages of 25 and 44.
Using a machine learning algorithm, they were able to determine the socio-economic status (SES) of every of each person. The information included their median income, age, and sex, as well as the value of their phone, which is considered a proxy for individual income.
The median income is about $58,000, while researchers divided the individuals into two groups to classify the median SES and those with higher income. They found that only 38% of the friends of people below the median SES were above the SES, while about 70.6% of the friends of people above the median SES were also a part of the same group.
When the results are compared to a research project at Harvard University called the Opportunity Atlas, which uses census and tax data to determine average household income at 35 years old, they found that poorer children were more likely to have higher incomes in adulthood if they were born in areas where poorer people had higher numbers of rich friends.
For instance, those who are below median SES in Minneapolis and Minnesota have 49% rich friends, while those in Indiana and Indianapolis only have 32%. At 33 years old, more people in Minneapolis had an average household income of $34,000 which is greater than the $24,700 average income of those in Indianapolis.
Improving Exposure to Other Classes
Dr. Chetty, the lead author of the research, said that lack of exposure prevents economic connectedness among children of different household incomes and therefore affects their subsequent income mobility.
According to Telegraph's report via MSN, 50% of the reason for the economic disparity between the low and high-income households is due to the lack of exposure as a result of living in different neighborhoods, going to different schools, and many other factors. Hugh Lauder from the University of Bath in the UK said the findings show very interesting implications in the understanding of education and social mobility.
Another reason is that the more segregated students are in geographic locations, the less likely they will be able to make friends with students from high-income families. The team hopes that these findings will help policymakers push for well-mixed schools in terms of student composition.
Changing admission criteria promotes improvement in mixing across classes in schools, as well as introducing new initiatives to enable greater economic connectedness among children both in and outside of school.
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