The Price Children Pay for Exclusive Suburbs
Diverse schools are a key tool for economic mobility. But current policy is making schools less, not more, diverse.
By Katie Roberts-Hull
Australia has long prided itself as the land of the “fair go” reflecting a belief in equality of opportunity, fairness, and social mobility. Education is often the foundation of social mobility. If you work hard in school and get a good education, you can have a great life. The rising cost of housing is putting this long-standing compact in jeopardy. Buying a home is harder than ever, even for educated professionals.
Alan Kohler has observed that “education and hard work are no longer the main determinants of how wealthy you are; now it comes down to where you live and what sort of house you inherit.” New South Wales Treasurer Daniel Mookhey echoed this, warning that having property-owning parents is beginning to matter more than getting a degree.
Housing affordability problems also risk an unfortunate cycle of increasing disadvantage: families cannot afford a home, they are pushed out to areas far from higher-paid jobs, their children go to schools isolated from more privileged peers, and they have less educational attainment as a result.
Australian cities have long restricted housing density in wealthier established suburbs. Allowing more supply of housing in these areas could not only improve affordability for families, it could also reshape educational equity by diversifying the neighbourhoods around our schools.
Why postcodes matter for kids
A growing body of research shows that where children grow up can have a causal impact on their life outcomes. In the United States, groundbreaking studies by economist Raj Chetty and colleagues found that children who moved from a low-income neighbourhood to a higher-opportunity area before age 13 were more likely to attend university and have substantially higher future earnings. The children were also likely to live in better neighbourhoods as adults. These findings suggest that efforts to integrate disadvantaged families into mixed-income or more affluent communities have causal, lasting effects.
Australian data paints a similar picture. Economist Nathan Deutscher, replicating Chetty’s approach, found similar causal effects of place, even though Australia has less economic inequality than the United States. Deutscher found that children who move to a new neighbourhood have outcomes matching other children in that area. Earlier moves to higher-opportunity areas are linked to better outcomes.
Why does location have such power? One answer lies in peer effects and social networks. Affluent neighbourhoods often mean access to a web of connections and expectations that pull kids upward. Schools in mixed-income communities can help facilitate friendships across class lines. Chetty’s recent research on social capital—drawing on 72 million Facebook friendships—found that the single strongest predictor of a community’s upward mobility is the degree of “economic connectedness”, or friendships, between low-income and high-income people.
In Australia, parents are much more likely to choose a private school compared to the US.Block Field Despite this difference, Deutscher found the same outcomes in Australia as Chetty’s research in the US. It is likely that lower-income children in Australia get the benefit of peer networks in a more affluent community regardless of whether they go to government or non-governmental organizations schools, because either way they are interacting with peers from a higher socioeconomic background.
Communities where poor kids have more high-income friends tend to have much higher rates of those kids climbing the income ladder in adulthood. Conversely, places with stark class segregation—whether by neighbourhood or by school—see mobility stall.
For Australians watching our own housing markets tighten and education outcomes diverge by suburb, the research on social mobility poses a question: how can we improve the geography of opportunity?
Katie is the Managing Director of Think Well, which helps teachers improve student outcomes.
The remainder of this article is published in full on Inflection Points.