Aug 2, 2022 - Economy & Business

The power of friendships between poor kids and rich kids

For a poor kid, having wealthy friends is one of the strongest determinants of economic mobility later in life.

Why it matters: That data point, from a study published in the journal Nature today, underscores the real-world power of friendship.

  • We know accumulating friends in different stages of our lives can decrease stress, lengthen life, improve our performance at work and even make us better parents.
  • We know friendships with our neighbors can be the difference between life and death in tragedies and natural disasters.
  • And now we know cross-class friendships are drivers of wealth and success for less fortunate kids.

The big picture: The study authors did a first-of-its-kind analysis of 72 million Facebook friendships between U.S. adults.

  • What they found: If poor children grew up in neighborhoods in which 70% of their friends were rich, their future incomes would be 20% higher than their counterparts who grew up without these bonds across class lines.
  • This was a stronger indicator of future income than factors like family structure and school quality, as well as the racial makeup and job availability in the child's community.

Reality check: It's not that simple. Friendships across class are increasingly hard to come by in our divided country.

  • For example, for people in the bottom 10% of the income distribution, only 2.5% of their friends are in the top 10%, Johannes Stroebel, an economist at NYU and one of the study authors, tells Axios.
  • There are some cities that are doing better than others. In Salt Lake City and Minneapolis, nearly half of the friends of folks in the bottom half of the income distribution are in the top half. But in Indianapolis, only about 30% of poorer people's friends are rich.
  • And there are certain spaces where cross-class bonds are built more frequently, Stroebel says. Churches, temples and other religious spaces are in that category.

What to watch: There are big policies — like implementing school busing, diversifying college admissions by class, and increasing the availability of affordable housing — that can boost the prevalence of cross-class friendships.

But we can all make a greater effort to diversify our friend circles.

  1. Reach out to people at your place of worship, your dog park or your grocery store.
  2. Meet people through volunteer work around your community.
  3. Take your kids to free activities at parks and local libraries that are available to families of all backgrounds and where children can make friends with kids from all walks of life.
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