Richer Childhood Friends Boost Future Income, Facebook Data Shows

An analysis of 21 billion Facebook friendships shows that children from poorer homes are likely to earn more later in life if they grow up in areas where they can become friends with wealthier kids.

This article was originally published by Insider Paper.

It has long been believed that having rich friends can help children rise up out of poverty, but previous research has had small sample sizes or limited data, according to two studies published in the journal Nature on Monday.

So a team of US-based researchers turned to Facebook, the world’s largest social database, with its nearly three billion users offering unprecedented scale and precision to examine the issue.

They analysed the privacy-protected data of 72  million US Facebook users aged between 25 and 44  years. The Facebook friendships were used to represent real-world friendships.

The researchers used an algorithm to rank users by socio-economic status, age and region, among other factors.

They then measured how much richer and poorer people interacted with each other and created the term “economic connectedness” to represent the share of a person’s friends who were above or below the average socio-economic level.

They then compared this measure with previous research into children’s ability to escape poverty in every US zip code.

The results were “strikingly similar”, said Raj Chetty, an economist at Harvard University and the lead author of the two studies.

The first paper showed that economic connectedness “is one of the strongest predictors of economic mobility that anyone has identified to date,” Chetty said.

The second paper sought to find out why children from richer or poorer backgrounds are more likely to make friends in some areas than others.

– Let’s be friends –

The researchers found two major factors. One was how much the two groups are exposed to each other — for example whether they attend different high schools or live in separate neighbourhoods.

Even if wealthy and non-wealthy students did go to the same school, however, they still might not hang out with each other — a factor the researchers called friending bias.

Around half of social disconnection between the rich and poor was due to lack of exposure to each other, the study found.

“But the remaining half is explained by friending bias,” Chetty said.

The findings showed that US policies aimed at reducing economic segregation between schools and regions were important but “not enough,” he added.

Where richer and poorer children meet has a major influence on whether they become friends — meaning that institutions play a major role, the study found.

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

The data on exposure and friending bias was published on socialcapital.org on Monday, with researchers hoping it will prompt authorities across the United States to act.

Chetty predicted that similar results would likely be found in other countries, urging researchers and governments worldwide to access their own Facebook data.

Noam Angrist of Oxford University and Bruce Sacerdote of Dartmouth College in New Hampshire said the research represented “an important contribution that will enable a deeper understanding of social capital”.

“A sensible next step is to extend Chetty and colleagues’ monumental data creation and analysis to countries beyond the United States,” they wrote in a linked comment in Nature.