As Philadelphia climbed in global recognition over the past decade, winning acclaim for everything from its startup ecosystem to the restaurant scene, widespread poverty has remained pervasive.

New research on economic mobility offers suggestions for how to move the needle: Making targeted place-based investments.

Philly’s financial pain has lessened in recent years, but it’s still unevenly distributed. 

The city’s overall poverty rate dropped to 20.3% in 2023, the lowest since the turn of the millennium, per Pew Research. That’s an average of rates across demographics, which vary widely: 13% for white households, 25% for Black and 26% for Hispanic.

And while the racial gap in economic outcomes for kids born into poverty has narrowed, it correlates not to improved outcomes for Black residents, but a decrease for white residents.

“For Black children born in poverty here, economic mobility has remained stagnant, and in some cases, it has even declined,” economist Raj Chetty said at an event at the National Constitution Center in Philly last fall.

The leader of Harvard-based research group Opportunity Insights, Chetty did not pull punches. 

“Philadelphia ranks dead last — 50th out of 50 metro regions — in economic mobility,” he told civic leaders assembled to hear new data from his team, which analyzed the 50 largest regions in the country.

 

Boosting economic mobility, defined as the likelihood that a child born into poverty will earn more as an adult, can help address many social challenges, from income inequality to crime and health disparities. Chetty has long focused on this topic, including his 2017 “Lost Einsteins” study, which explored how many potential innovators are stifled by poverty and systemic barriers.

The path forward is less mysterious than it may seem. Per the latest Opportunity Insights research, three strategies can significantly improve economic outcomes:

  • Increase income integration at the neighborhood level
  • Support stable families
  • Foster interactions between residents of different income levels

“The roots of rates of economic mobility are hyperlocal,” Chetty said. “This is fixable.”

Philly’s low ranking doesn’t have to become its reputation

When Opportunity Atlas first launched in 2018 as a partnership between Chetty’s Harvard lab and the US Census Bureau, it sparked a lot of reporting, and some activity by civic leaders. 

Updates since then have made the map even more useful for anyone who wants to know more about their region’s economic situation. It has an extra decade worth of data, comparing people born into households with lower incomes between 1978 and 1992, and maps the info on the county level, instead of just by census tract. You can compare regions, break out the info by race or ethnicity or gender, and download data 

It’s all part of a national body of research, localized with the financial backing of Comcast, Bank of America, the Pew Charitable Trusts and the William Penn Foundation. 

While Philadelphia’s ranking at the bottom of economic mobility metrics is discouraging, it’s not a permanent condition, according to Amy Liu, presidential advisor and senior fellow at the Brookings Institution.

“It’s possible to change this,” Liu said. “Regions like Charlotte have shown that improvement is within reach. It’s time for Philadelphia to commit to the long-term work of fostering economic opportunity.”

Charlotte offers a roadmap. Place-based policies like affordable housing and universal pre-kindergarten in the region led to a rise in economic mobility rankings from 50th to 38th in just a decade, according to Sherri Chisholm, executive director of economic development org Leading on Opportunity.

Chetty pointed to the Department of Housing and Urban Development’s Hope VI program, which replaced the Mill Creek Homes with the Lucien Blackwell Homes in West Philadelphia. That redevelopment led to measurable improvements in childhood outcomes.

The solutions are not obscure, he said. Chief among them is “economic connectedness,” a metric developed in partnership with Meta that tracks how often low-income individuals are socially linked to higher-income peers, particularly through platforms like Facebook.

In fact, those mixed-income relationships are associated with higher economic outcomes for children in lower-income families. One way to do this is for experienced entrepreneurs and elite tech workers to become more enmeshed in their communities, instead of closed-off groups. 

He described it as a “superpower” for progress.

“The single strongest predictor of economic mobility is economic connectedness,” Chetty said. “These relationships expand networks, give kids exposure to different economic outcomes and foster upward mobility.”

Christopher Wink contributed to this report.