Why Some Neighborhoods Help People Escape Poverty

Amanda Fisher
Community Engagement Director
Read more from Amanda

 

Scientific research is a valuable resource for learning about charitable programs’ best practices. Often, a well-designed study does a better job of confirming or disproving assumptions than anecdotal observations or deliberate outcomes measurement. This synopsis addresses the findings of a 2022 study entitled Social Capital I: Measurement and Associations with Economic Mobility.

What Question Does This Research Answer?

What impact does social capital have on upward economic mobility?

The study surveyed data across 21 billion friendships on Facebook to examine the effects of three kinds of social capital (or social connectedness) on upward economic mobility: cross-type economic connectedness (relationships between those with low vs high socioeconomic status); social cohesion (i.e., cliques in friendship networks and how many friends are friends with each other); and civic engagement (i.e., volunteering).

Study Design

Data Source: Facebook

Sample Size: The data is based on 72.2 million Facebook users ages 25-44 in the United States across 21 billion “friendships.”

Type of Study: This is an observational study, which means researchers observed the apparent effect of an intervention without determining who does and does not receive the intervention. 

Limitations: Because this is a natural experiment rather than a randomized control trial, the results can only suggest correlation rather than causation. Additionally, as correlations are made, one must be cautious of using Facebook to provide a comprehensive picture of one’s social network’s breadth and depth. 

Key Findings

  • Of the three types of social capital examined, cross-type economic connectedness is the most important in predicting upward economic mobility. “If children with low socioeconomic status parents were to grow up in counties with economic connectedness comparable to that of the [typical] child with high socioeconomic status parents, their income in adulthood increases by 20% on average.” 
  • Economic connectedness in a community is the single best population-level predictor of whether children who grow up there will be upwardly mobile. It is more significant than neighborhood median income, degree of racial segregation, income inequality, math test scores, and the ratio of single-parent households (which still matter, just to a lesser degree). In fact, the study suggests economic connectedness is such a significant factor that, regardless of ZIP code, nearly all variations in income mobility outcomes for children can be explained by economic connectedness.
  • In-group cohesion may have other benefits not evaluated by this study, but it’s not a significant driver of economic mobility.
  • Almost none of the lowest-income ZIP codes in the US exhibited high levels of economic connectedness. If there were a few higher socioeconomic status individuals in the vicinity, there appeared to be very little opportunity for people with low socioeconomic status to connect with them. This echoes the observation of sociologist Peter M. Blau that “persons cannot associate without having opportunities for contact.”

Practical Application 

Poverty is complex, so it’s refreshing to find a study that demonstrates factors other than one’s ZIP code that affect upward economic mobility. All else being equal, it’s common knowledge kids in poor neighborhoods have worse life outcomes than kids growing up in better ones. Therefore, it’s significant this study strongly suggests neighborhood effects can be entirely offset by increasing economic connectedness. Of equal importance, it provides a very tangible focus point to help neighborhood development organizations prioritize an overwhelming list of things they could help improve.

As well, the study supports a True Charity basic belief that relationships are a key antidote to poverty and are vital in breaking generational cycles of poverty. These findings should persuade those of higher socioeconomic status–especially within the church–to open themselves to bonding with those of lower socioeconomic status. Doing so will create an environment that fosters sincere, caring relationships.

Because these connections are essential for upward mobility, we must continue to emphasize bridging social capital through mentoring and other relationships. This study clearly shows the importance of implementing programs that promote economic connectedness, such as Circles USA or Faith and Finances. 

The research also supports the need for training volunteers to build relationships with people in need (as opposed to simply completing tasks on their behalf). 

Finally, one must be careful about insinuating higher socioeconomic status or upward economic mobility equals flourishing. Benefits to engaged, clustered societies beyond income mobility should be considered.

Conclusion

Churches and nonprofits must focus energy on building relationships with individuals struggling in poverty–specifically, bonding with those of a different socioeconomic status. Join the True Charity movement for practical tools and tips on how to get started or improve your current charitable efforts.

Read the Study

You can access it here:  Social Capital I: Measurement and Associations with Economic Mobility.

Also, explore the data for your specific area through this helpful tool.

 

Do Holistic, Individualized Programs Really Make a Difference? Let’s Look at the Research.

SONYA STEARNS
Network Manager
Read more from Sonya

 

Listen to this article:


Scientific research is a valuable resource for learning about charitable programs’ best practices. Often, a well-designed study does a better job of confirming or disproving our assumptions than anecdotal observations or deliberate outcomes measurement. This synopsis addresses the findings of a 2023 working paper entitled Fighting Poverty One Family at a Time: Experimental Evidence from an Intervention with Holistic, Individualized, Wrap-Around Services.

What question does this research answer?

“How does holistic, individualized wrap-around intervention affect outcomes for a broad population of low-income individuals?”

This study examines the impacts of the Padua Program on individuals and families facing poverty. Its wrap-around services (or holistic support services) are characterized by a comprehensive, personalized approach that addresses participants’ primary needs (such as housing, employment, and financial stability). Padua’s case management is asset-based and relational, meaning case managers empower participants based on strengths and abilities they bring to the table. The findings reveal Padua participants experienced significant improvements in employment outcomes with higher rates of full-time employment and increased monthly earnings. It also positively affected housing stability and physical health; and reduced reliance on government programs. In short, the program demonstrates the value of interventions tailored to the unique needs of participants, emphasizing the importance of a holistic approach to poverty alleviation.

Study Design

Data Source:
Catholic Charities of Fort Worth (CCFW)
Padua Program asked Notre Dame’s Sheehan Lab for Economic Opportunities (LEO) to study participants who entered their program from February 2015 through October 2016.
Sample Size:
The study included 427 participants. Of those, 193 were placed in the treatment group and 234 in the control group. Participants were in the program for an average of seventeen months.
Type of Study:
This study was a “Randomized Controlled Trial (RCT),” which means researchers select a random sample of people who receive intervention (the treatment group) and a random group who do not (the control group).
For example, if your thesis is higher education causes higher income, you could provide free scholarships to a random group of students and compare their outcomes to students who do not receive a scholarship. RCT is considered the gold standard for proving intervention causes the outcome (versus being a correlation of it).
Limitations:
Due to the study’s small size, the components of the Padua program that drove positive outcomes could not be determined. Additionally, while the study proved the program’s efficacy, it did not settle the question of whether other organizations’ use of Padua would achieve similar results. Some elements, like the skill level of the case managers, could be difficult to replicate.

Key Findings

  1. Unemployed individuals saw favorable workforce outcomes from the Padua program.
    Participants who entered the program without employment were 67% more likely than the control group to be employed full-time after twenty-four months. They also experienced a 46% increase in earnings, earning $420 more per month than individuals in the control group.
  2. Families saw a stabilization in their situation through housing.
    Participants who entered the Padua program without stable housing saw a stabilization of their situation after 24 months. In fact, they were 60% more likely to achieve it than the control group.
  3. Intense, asset-based case management helped increase their ability to participate more fully in a community (through jobs, stable housing, education, etc.) and improved their health.
    In a qualitative survey, forty-three percent self-reported improved mental, physical, relational, and emotional health. Even without objective data, the individuals perceived better overall well-being, indicating improved mental and emotional stability.
  4. Targeted and longer durations of case management were initially more costly per individual but were likely more economical for service providers in the long run.
    Case management in the Padua program costs almost $23,000 per individual over two years. Initial upfront costs for relational case management are higher because each case is targeted (that is, each client’s unique assets, liabilities, and situation are considered). Pauda suggests that investment leads to fewer clients returning to the program, leading to cost savings over time.

Practical Application

The treatment group in the Padua Program achieved better long-term self-sufficiency than those in the control group. The success of the program suggests its holistic approach may produce similar results for your organization. Here are a few highlights to consider for your program:

  1. Intense case management and small caseloads are the foundation for success because they foster commitment and relationship.
    Our Case Management Toolkit provides everything you need to implement asset-based, relational case management in your own context.
  2. Prioritize stabilized living situations for job seekers.
    As demonstrated, those in the treatment group with stable housing secured jobs more readily and increased their wages more substantially than the control group. This suggests achieving overall stability is sequential–with housing a higher initial priority than boosting income. Long-term transitional housing can assist in meeting that need, and we’ve developed a toolkit to help you implement this model in your own setting. As well, it’s important to remember everyone can progress, but they will not do so at the same rate nor in every area simultaneously.

Conclusion

This research supports implementation of an asset-based, relational case management plan for individuals and families facing poverty. The findings highlight the value of tailoring care to meet the unique needs of participants, emphasizing the importance of using what we call subsidiarity to meet root cause needs. The Padua Program is a successful example of its effectiveness and thus a worthy model from which to learn. Its detailed assessment tools and case management plan support positive, long-term self-sufficient outcomes.

Read the Study
Fighting Poverty One Family at a Time: Experimental Evidence from an Intervention with Holistic, Individualized, Wrap-Around Services | NBER

 

 

 

This article is just the tip of the iceberg for the practical resources available through the True Charity Network. Check out all of the ways the network can help you learn, connect, and influence here.

Already a member? Access your resources in the member portal.