Friday, February 26, 2016

What's the secret number for success in life?

Every once in a while, people seem to wake up and realize that geography matters. And then they make a big deal out of it, while some of us--especially those who teach and think economic geography--wonder, ahem, if only you would listen to us!

I have blogged many times, like here, that the best thing one can do for a high probability of economic success is to choose the parents well.  But, of course, that is not a choice that is in our control.  It is not the parents as in the genes within us, but in terms of where we are born and raised.  A good chunk of one's life trajectory is decided right there.

Today, the media reports on yet another research that the geography matters, when it comes to economic success and failures.  In this case, it was about "the geography of economic well-being and distress" after the Great Recession:
We found some really startling results. First and foremost, we're looking at the recovery years here. This dataset starts in 2010 - so after the recession is over. And what we find is that not only does the recovery not lift distressed communities, it actually bypasses them altogether
What does that look like?
You see double-digit loss in employment. You see significant loss in business establishments - again, double digits. This just does not mirror what's happening in the rest of the country. So those that were most vulnerable before the recession are worse off after those early years of the peak recovery.
And if one compares the elite zip codes and the distressed ones?
If you look at the topmost prosperous and the bottommost distressed, it really is like looking at two different countries. In the most-prosperous ZIP codes, you're unlikely to run into somebody who hasn't graduated from high school. You're unlikely to see a vacant home. Your're unlikely to run into somebody who lives below the poverty rate. All of those factors are inverted in the bottom decile, where you have the vast majority of adults out of work. You have establishments eroding very quickly.
Ok, what about when we look at the communities in between the two extremes?
Communities between these two extremes have managed only to tread water in recent years, the study found. Employment in communities in the median ZIP codes increased only slightly and the number of businesses did not grow at all.
The really, really awful part is this:
once a downward spiral begins, it is very difficult for residents or local political leaders to reverse the slide. “When businesses close and there is no investment, the tax base erodes,” Mr. Lettieri said. “Local governments can’t invest their way out.”
Many students in my classes know this all too well from their personal experiences.

So, can you give us a bottom-line?
Where you start has an enormous impact on where you end up in life.
Aha!  Yet another piece of research about the same conclusion. One can then easily imagine the implications for "equality of opportunity" for kids born in the "wrong" zip codes, right?

I will stay away from discussing this with the students in my economic geography class.  I provide them with enough depressing news already!

3 comments:

Ramesh said...

In general yes - luck of where you were born does play a crucial part. But it is incorrect to say that there is no possibility of clawing your way out of a bad luck of the draw. Come to India and see the number of people born in extremely disadvantaged 'PIN codes" and see how they have risen. It used to be the same story in the US decades ago. Now the world has moved on and many of your countrymen have lost that burning desire and hunger to excel and succeed.

Yes, its not perfect, but at least in those countries where the majority of the world lives (India and China) a fair number of people can rise from the circumstances of their birth.

Anne in Salem said...

So being dealt a lousy deal from the beginning destines you for destitution? I can't believe it. How much of the situation is causal versus coincidental? Why don't people in the bottommost distress move for better opportunity? Have they lost their desire and hunger to excel and succeed (nice phrase, Ramesh)? Have government handouts (almost three years of unemployment payments would make life easy) lulled people right out of their own motivation?

Yes, yes, it is hard to overcome one's situation. I understand, but I see people doing it every day - working hard for long hours or two jobs, educating their children, sacrificing - so they can get out of poverty and give their kids a better life. Perhaps where you were born and your parents' attitudes determines your work ethic more than anything.

Sriram Khé said...

We will have to agree to disagree, because I don't think I can ever make you change your political views on this.

1. When you present "success" stories from India, you are overlooking quite a few issues, such as:
a. the macro picture, where you find that every day the historically disadvantaged population continue to protest their economic marginalization.
b. the Indian spatial set up with its history means that there are no new :zip codes" as we have in the US, where the privileged have moved to.
c. when a country is poor, of course the odds are that the trajectory would be upward.

2. Here in the US, data--yes, solid evidence--points out that zip codes make a tremendous difference. Take public schools, for instance. Even my students will tell you, as they often remark in classes, how shortchanged they realize they were when they meet other students from other zip codes. Even in things like advanced classes and art classes.

3. And then when you look at the global data--and I have often linked in my posts to Milanovic--when you line up all the seven-billion-plus, data (solid evidence, my friends) show that 80 percent of one's economic future is determined by geography and one's parents.

All these have nothing to do with work ethic and laziness and anything else that is nothing but political ideological speak.

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