Dynamic Individuals, Static Neighborhoods: Migration and Earnings Changes in Poor Neighborhoods

Using administrative data linking residential histories to longitudinal earnings, we show that while many residents of poor neighborhoods have persistently low earnings and remain in concentrated poverty for extended periods, a large number also experience sizable earnings growth and move to richer areas. Estimates based on idiosyncratic, firm-specific pay changes show that part of this sorting is causal — earnings increases induce upward moves. On net, selective migration depresses the growth of poor neighborhoods’ average earnings by roughly 60 percent and represents an underappreciated driver of the persistence of concentrated poverty.