Where you grow up shapes who you know – and who you know shapes where you end up, not least in terms of your earnings later in life. Research is revealing that the way in which social connections are distributed across places is closely linked to economic opportunities.
In the UK, the family you are born into still goes a long way in determining what you earn as an adult. Children born in the late 1980s inherit roughly one-fifth of their parents’ income advantage in early-career earnings. Data on cohorts born almost two decades before suggest that this share has barely changed, and that it roughly doubles over a lifetime.
But national figures obscure just how much place matters. The UK is one of the most spatially unequal economies in the OECD, and social mobility is no exception. Adult earnings for children from disadvantaged backgrounds vary by up to ÂŁ9,000 per year depending on the local authority in which they grow up. Indeed, there are sharp differences in adult earnings even between neighbourhoods within the same local authority.
Areas vary in their schools and employment opportunities, but even after accounting for both, large differences in opportunity remain. A recent study led by researchers at the Behavioural Insights Team and Meta analyses six billion friendships across 20 million Facebook users in the UK, and finds local levels of social capital to be one of the strongest predictors of where disadvantaged children end up.
Children on free school meals who grow up in the most socially connected areas earn around 28% more per year at the age of 28 than those in the least connected ones. Whether such connections form depends on where and how people meet – and both can be shaped by policy.
Where does social capital create opportunities?
Social capital describes the relationships and trust that hold a community together. Decades of research show how people find jobs, shape their educational choices and form their aspirations through the people around them. When those people are mostly from the same background, the same information and opportunities circulate within the group, and the resources that come with knowing the right people stay concentrated among those who already have them.
Cross-class friendships can break that pattern, and they turn out to be a strong predictor of social mobility. In the UK, people below median income form nearly half (47%) of their friendships with those above it. A previous study using equivalent data in the United States puts that figure at 39%.
That sounds encouraging. It is less so when you look at the map (see Figure 1). In the well-connected areas of the affluent south of England, 57% of a low-income person’s friends are higher-income. In economically deprived areas like coastal towns in the northeast or across the Scottish central belt, that drops to 42% and lower.
Figure 1. Economic connectedness
Average share of the friends of low-income people who have high incomes across UK postcode districts
Type your own postcode district to see how connected your area is.
The gap reflects more than simply who lives where. Areas with similar levels of deprivation, education and age structure can look very different in terms of cross-class friendships.
How a place developed matters too. The places where connectedness is lowest are those shaped by coal and heavy industry. The collieries and steelworks are gone, but the social patterns that they shaped remain.
Cross-class friendships are not the only form of connection that the research links to mobility. The reach of people’s networks matters too. Long ties – friendships where two people share no friends in common – capture whether someone’s connections extend beyond their immediate circle.
Unlike cross-class friendships, long ties are not concentrated in affluent areas. Even some of the most deprived neighbourhoods in the country display high levels of them, and it is along this dimension that mobility outcomes in deprived areas diverge most.
Take Westcliff-on-Sea and Canvey Island, which sit next to each other in Essex. Both are deprived. But residents of Westcliff have roughly one extra long tie per hundred friends, and children from disadvantaged families there earn around 19% more at the age of 28 – about £2,200 per year.
These are correlations, not proof of cause and effect. The relationships hold after accounting for area-level income, education and health. So, social capital is not simply standing in for other forms of advantage.
The cross-class friendship finding mirrors US results. The long-tie finding does not: in the United States, long ties are only weakly linked to mobility. That divergence is worth understanding, but the broader pattern – that where and how people connect predicts where they end up – holds across both countries. If that is right, there is a case for policy to take it seriously.
What can local policy-makers do to strengthen social capital?
Two things need to happen for connections between people from different backgrounds to form. First, they need to share the same spaces. Second, those spaces need to be organised in ways that actually produce friendships. Policy-makers can act on both.
Many friendships form early in life, which makes schools a natural place to start. But schools increasingly segregate by income. The best-performing schools have five percentage points fewer free school meal pupils than average, as shrinking catchment areas and rising house prices create wealth barriers to entry.
Admissions reform can help. Reserving places for low-income children has produced cross-class friendships in other contexts, and since 90% of secondary schools in England control their own admissions, it can be done locally. Brighton and Hove Council already does this, prioritising disadvantaged pupils so that no single school has a concentration of poverty. Other local authorities could follow without waiting for national reform.
Residential mixing is less straightforward. Research on mixed-income neighbourhoods in the UK finds that even where people from different backgrounds live side by side, they tend to socialise away from home and interactions across income groups stay superficial. Living near someone is not the same as doing something with them.
When people are brought together through shared activities, the picture changes. Randomly assigning people to mixed sports teams has been shown to build cooperation and reduce prejudice across deep social divides.
The same logic applies to community centres, leisure facilities and local clubs. Small, practical changes could turn routine encounters into opportunities for cross-class connection – a family hub class that brings new parents together regardless of income; a youth programme that mixes teenagers from different schools; or a leisure centre that prices activities to reward mixed sign-ups.
Where children grow up still determines too much of where they end up. How they are connected to the people around them is part of the reason, and something that policy can shape.
Many levers that matter sit at the local level. Schools can admit more fairly, and community spaces can be designed to bring people together across backgrounds. Using them well could help to close the gap.
Where can I find out more?
- Andy Haldane and David Halpern review the economic case for treating social capital as a policy priority for Demos.
- The Social Mobility Commission publishes the most comprehensive annual assessment of mobility in the UK.
- Laura Outhwaite and Lindsey Macmillan survey evidence-based approaches to equalising opportunities.
- The Neighbourhoods Commission examines how social infrastructure in disadvantaged areas has deteriorated.
- Opportunity Insights provides interactive tools for exploring how neighbourhoods shape economic outcomes in the United States.
Who are experts on this question?
- Lindsey Macmillan (UCL)
- David Halpern (Cambridge)
- Simon Burgess (Bristol)
- Lee Elliot Major (LSE)
- Matthew Jackson (Stanford)
