Richer childhood friends boost future earnings, Facebook data shows

 Monday 01 August 2022

A representative image of children holding hands. — AFP/File

PARIS: Children from poor homes are more likely to earn more later in life if they grow up in areas where they can befriend rich kids, an analysis of 21 billion Facebook friendships shows.

It's long been thought that having rich friends can help children climb out of poverty, but previous research has had small sample sizes or limited data, published Monday in the journal Nature. According to two studies.

So a team of US-based researchers turned to Facebook, the world's largest social database, with nearly three billion users offering unprecedented scale and accuracy, to test this problem.

They analyzed privacy-protected data from 72 million American Facebook users between the ages of 25 and 44. Facebook friendships were used to represent real-world friendships.

The researchers used algorithms to classify users by socio-economic status, age and region, among other factors.

They then measured how rich and poor people interacted with each other and coined the term "economic contact" to represent the share of a person's friends who are above or below the average socio-economic level. were

They then compared this measure with previous research on children's ability to escape poverty in each US zip code.

Raj Chetty, an economist at Harvard University and lead author of both studies, said the results were "surprisingly similar".

Chetty said the first paper showed that economic ties are "one of the strongest predictors of economic mobility that anyone has identified to date."

Another paper sought to find out why children from rich or poor backgrounds make more friends in certain areas than others.

Let's be friends

The researchers found two major factors. One was how exposed the two groups were to each other -- for example, whether they attended different high schools or lived in different neighborhoods.

Even if wealthy and non-wealthy students go to the same school, however, they still won't hang out with each other -- a factor researchers call friendship bias.

The study found that almost half of the social interaction between the rich and the poor was due to not being exposed to each other.

"But the other half is explained by friendship bias," Chetty said.

He added that the findings show that U.S. policies aimed at reducing economic segregation between schools and regions are important but "not sufficient."

Where rich and poor kids meet has a big impact on whether they become friends -- meaning institutions play an important role, the study found.

For example, friendships in religious institutions like churches "were much more likely to cut across class lines," Chetty said.

Data on exposure and friendship bias were published Monday on socialcapital.org, which researchers hope will prompt United States officials to take action.

Chetty predicts similar findings in other countries, urging researchers and governments around the world to access their Facebook data.

The research "represents an important contribution that will enable a deeper understanding of social capital," said Noam Engrist of the University of Oxford and Bruce Scerdot of Dartmouth College in New Hampshire.

"A sensible next step is to extend the monumental data generation and analysis of Chetty and colleagues to countries outside the US," he wrote in an accompanying commentary in Nature.