Dynamic Individuals, Static Neighborhoods: Migration, Earnings Changes, and Concentrated Poverty
Abstract
We use administrative data to document a high degree of migration across neighborhoods and neighborhood types defined in terms of poverty rate and median income. Neighborhood quality increases over an individual’s life cycle, and people also move to better neighborhoods in response to earnings improvements. We then develop several implications of these initialfacts for high-poverty neighborhoods. First, resident turnover in these areas is rapid. Second, among the people living in a poor neighborhood at a point in time, the distribution of future concentrated poverty exposure is bimodal. Young people, renters, and those with children tend to spend fewer than half of the next ten years in similar neighborhoods, while older people and homeowners are unlikely to exit concentrated poverty. Third, poor neighborhoods tend to remain poor because of a dynamic process in which initial residents experience high earnings growth but disproportionately out-migrate when earnings improve, contrasting with a pure “poverty trap” understanding of persistent concentrated poverty.