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Date: April 2017
Category: Thinking On...

The Economic Futures of Kids and Communities

Kelly Nelson

Last week, I joined more than 500 researchers, policymakers and practitioners from across sectors in Washington DC for the Federal Reserve System’s 10th Biennial Community Development Research Conference, where we discussed cutting-edge research related to this year’s conference theme, Strong Foundations: The Economic Futures of Kids and Communities. The event highlighted data and research around improving economic conditions for vulnerable populations with a specific focus on the kind of environments and resources that help children reach economic success in adulthood. We heard from speakers ranging from Federal Reserve Chair Janet Yellen to Geoffrey Canada, founder of the Harlem Children’s Zone.

While this year’s conference theme was closely aligned with Gary Community Investments’ four strategic outcome areas, it’s also a topic that is close to my heart. As a former low-income school teacher, I have experienced many of these issues on a micro-level, yet attending this year’s conference required me to think like an economist and consider a macro-level perspective. As an example, the economists think of our most vulnerable children in terms of yield on investment, referring to them as “high-return children.” While this may have been unfamiliar terminology for me, the key ideas and learnings were of value nonetheless.

The following are my top takeaways from two days filled with plenty of multi-disciplinary quality research and dialogue.

  • The quality of neighborhoods and community matter. Scientific research confirms that living in high poverty neighborhoods significantly impacts children’s economic mobility. Stanford Economics Professor Raj Chetty recently conducted several research studies describing the impact of community and intergenerational mobility. Conference presenters widely cited Chetty’s research as a means to illustrate with data that where a child grows up affects economic mobility, academic performance and health. When policymakers discuss “housing,” the urban economist perspective would contend that, in addition to the physical structure of the house, “housing” also comprises: schools, crime rate, stores, neighbors, land-use regulations, property-taxes and affordability. For instance, oftentimes schools in low-income neighborhoods experience concentrations of disadvantaged students. Concentrations of either advantaged or disadvantaged students in communities are what drive intergenerational transmissions of poverty. These conversations left me wondering, what leads some communities to thrive and what factors prevent other communities from succeeding?

  • Access to high quality early childhood education, K-12 education and higher education matters. According to recent research, education is still considered the “great equalizer.” The two characteristics that differentiate the most successful young adults are higher levels of education and fewer teen births. Investing in quality education for children at a young age improves future labor market outcomes. There is also a correlation between increased school funding and improved academic outcomes as higher poverty schools tend to be under-resourced. In addition, recent research on brain development indicates the need for emphasis on non-cognitive as well as cognitive skills. Several presenters described that explicit instruction on “soft skills” and social emotional learning support vulnerable and at-risk youth in future success in the labor market. The Aspen Institute’s National Commission on Social, Emotional, and Academic Development leads some of this work, which examines how to integrate social, emotional, and academic development to support the whole student.

  • Racial equity matters. One of the most important takeaways from the research is that we cannot have conversations about intergenerational mobility and academic achievement gaps without positioning race as a focal point. While education may be the “great equalizer,” if students are starting out at different levels, disparities will remain. As one presenter quipped, “A rising tide lifts all boats, but at different rates.” The future labor market is diverse and the time is now to adjust systemic and structural behaviors and practices related to race/ethnicity to eliminate racial opportunity gaps. This could look like offering employers training around implicit bias or cultural competency. The Federal Reserve Bank of Minneapolis is tackling some of these issues through the creation of the Opportunity & Inclusive Growth Institute, which focuses on structural barriers to economic opportunity as well as national policies that impact diverse communities of people. In addition, the Institute for Child, Youth and Family Policy at the Heller School at Brandeis University presented a project,, focused on using data and mapping to advance child well-being and racial/ethnic equality.

For me, these conversations validated Gary Community Investments’ strategy, particularly our two-generation approach, which focuses on children by supporting their parents. In addition, the conference encouraged us to think about how we can strengthen the capacity of communities to support families raising children. The Federal Reserve’s Community Development Research Conference left me inspired to see economists and public policy experts relying on scientific data to raise awareness about issues that I witnessed first-hand for several years as a classroom teacher and now work on from a research perspective in my role within our organization.