Having Rich Childhood Friends is Linked To a Higher Salary as an Adult

Children who grow up in low-income households but who make friends that come from higher-income homes are more likely to have higher salaries in adulthood than those who have fewer such friends. From a report: "There's been a lot of speculation... that the individual's access to social capital, their social networks and the community they live in might matter a lot for a child's chance to rise out of poverty," says Raj Chetty at Harvard University. To find out if that holds up, he and his colleagues analysed anonymised Facebook data belonging to 72.2 million people in the US between the ages of 25 and 44, accounting for 84 per cent of the age group's US population. It is relatively nationally representative of that age group, he says. The team used a machine-learning algorithm to determine each person's socio-economic status (SES), combining data such as the median income of people who live in the same region, the person's age and sex and the value of their phone model as a proxy for individual income. The median household income was found to be close to $58,000. The researchers then split the individuals into two groups: those who were below the median SES and those who were above. If people made friends randomly, you would expect half of each person's friends to be in each income group. But instead, for people below the median SES, only 38 per cent of their friends were above the median SES. Meanwhile, 70.6 per cent of the friends of people above the median SES were also a part of the same group.

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