Policies and Practices to Strengthen Youth Mental Health,Academic Success,and Economic Mobility in Mixed-Income Neighborhoods and Schools

Abstract

Economic integration can combat high and rising inequality, but young people from economically disadvantaged backgrounds do not automatically benefit from mixed-income neighborhoods and schools. According to this research synthesis, although mixed-income settings can increase upward mobility, exposure to higher-income peers may have negative effects on mental and behavioral health, especially during adolescence. Policies should aim to maximize the benefits and minimize the costs of economic integration by prioritizing integration at a local level (e.g., block groups, classrooms), aligning housing and education policies, investing in third places (such as libraries, parks, digital platforms), and supporting youth belonging through identity-affirming environments and opportunities for collective action.

Keywords

mixed-income adolescence mental health economic integration housing policy neighborhoods education policy

Social Media

Children who grow up in economically integrated communities benefit in terms of upward mobility but may face mental health challenges. Policies can support youth in mixed-income contexts: integrate at a local level, align housing and education policies, develop inclusive physical and digital third places, and support youth belonging, strengths, and agency.

Key Points

Economic integration can promote long-term upward mobility but may harm mental and behavioral health among youth from low-SES households.

Mixed-income settings should prioritize integration at the local level, align housing and education policies, and invest in inclusive third places, such as parks and digital spaces.

To mitigate mental health risks, avoid structural divisions, such as separate amenities or pay-to-participate school activities, and promote belonging through relatable role models, identity-affirming environments, and collective action against inequity.

Digital tools are essential for future policy to facilitate cross-class connections in an increasingly online world.

Youth and families, especially those from economically disadvantaged backgrounds should be involved in further developing and testing these recommendations, with the support of policy makers, practitioners, and advocates in urban planning, housing, public health, and education.

Rising economic inequality and segregation limit opportunities for cross-class social interactions (Mijs & Roe, 2021). Most young people live in neighborhoods and attend schools alongside children from similar socioeconomic status (SES) backgrounds, with few opportunities to get to know peers from different SES groups. The negative health and social implications of economic segregation are well documented, leading many policy makers and practitioners to call for economic integration in neighborhoods and schools. But do economically integrated settings expand opportunities, or reproduce existing inequalities in new ways?

This paper synthesizes interdisciplinary research demonstrating the promise and limits of economic integration for the wellbeing of youth from lower-SES backgrounds. Wellbeing refers to mental and behavioral health, academic outcomes, and upward economic mobility. We describe how the effects of living or attending school in a mixed-income (versus economically segregated) context vary across outcomes. Effects also depend on youth's subjective understanding of the socioeconomic hierarchy and the extent to which such settings promote supportive cross-class relationships, which does not happen automatically. Policies and practices can benefit mixed-income contexts by fostering opportunities for positive cross-SES social connection and supporting youths’ belonging, strengths, and agency to redress inequality.

Defining Terms and Levels of Analysis

Socioeconomic status is a multidimensional construct, including income, wealth, educational attainment, occupational prestige, and social class (e.g., middle, working, upper class; Diemer et al., 2013). We use the terms “mixed income” and “economic integration” interchangeably as shorthand for settings that include a mix of families from diverse SES positions, including a mix of incomes, wealth, parental educational attainment, or social class.

This review focuses on the effects of economic integration in microsystem settings of schools and neighborhoods. A related literature examines the effects of economic inequality in broader settings such as counties, states, or countries. Findings consistently show that economic inequality in these more distal contexts is associated with worse health and social outcomes, especially among those from lower socioeconomic backgrounds, which is largely attributed to societal failures to invest in social safety nets to support lower-income communities (Pickett & Wilkinson, 2015).

How Economic Integration May Influence Youth Wellbeing

Economic integration may influence youth through multiple, potentially opposing, pathways. Exposure to higher-SES peers could increase access to valuable institutional resources (e.g., teacher quality, advanced coursework) and expose youth to positive role models for academic and career success, ultimately improving educational outcomes and upward economic mobility. Aside from direct effects on youth, there may be indirect effects via bridging social capital for both parents and youth. That is, connections between families across class lines could increase access to new information networks (e.g., regarding extracurricular activities) and opportunities (e.g., job leads).

Alternatively, being surrounded by a greater number of higher-SES peers may heighten awareness of status differences in ways that undermine youths’ mental and behavioral health. Theories of relative deprivation posit that in visibly unequal contexts people make frequent upward comparisons, which can dampen subject social status, making people feel lower in the social hierarchy, leading to mental and behavioral health problems and even physiological stress responses (Layte et al., 2019).

Additionally, intergroup (cross-SES) interactions in mixed-income settings are not automatically positive. Such interactions could expose youth to heightened experiences of SES-related social exclusion or discrimination, which has been linked to poor academic engagement and increased substance use (Mello et al., 2025; Starr et al., 2026). Moreover, social class is deeply racialized, such that SES-boundaries, prejudice, and discrimination frequently overlap with racial ones (Lei & Bodenhausen, 2017). As a result, both class and racism-related biases can constrain the formation of positive cross-SES ties in mixed-income settings (Chaskin & Joseph, 2015; Khare et al., 2015; Tach, 2014).

The effects of economic integration likely depend on dosage (how much time a young person spends in a mixed-income context throughout childhood) and developmental timing (whether exposure occurs prenatally, during early childhood, middle childhood, adolescence, or across multiple periods). To date, studies have focused on a single developmental period: adolescence. Adolescence, especially early adolescence, is a time when young people first begin to internalize the socioeconomic hierarchy, given their increased attention to status, heightened sensitivity to social exclusion, and greater cognitive capacity (Steinberg & Morris, 2001). While more research is needed, the effects of economic integration may be more pronounced during adolescence, relative to other periods.

The Short and Long-Term Effects of Economic Integration Across Multiple Outcomes

There is no consensus regarding how to measure economic integration. Most of what is known about this topic comes from research examining two related measures: relative deprivation and economic inequality. Relative deprivation is operationalized as the difference (actual or perceived) between youth's family SES and the average SES among neighborhood or school peers (e.g., Kim, 2020). Economic inequality is typically measured using the Gini coefficient, which quantifies the extent to which the distribution of socioeconomic resources deviates from perfect equality. A smaller set of studies examines how youth outcomes change as their exposure to higher-SES peers increases, for example through gentrification or policy interventions.

Being at the bottom of the socioeconomic hierarchy relative to peers is consistently associated with mental health problems and behavioral challenges during adolescence. Studies spanning North America, Western Europe, Latin America, Asia, and Africa find that relative deprivation in neighborhoods and schools is related to increased mood disorders, emotional problems, aggression, and substance use (Crosnoe, 2009; Haselbach et al., 2025; Kim, 2020, 2021; McLaughlin et al., 2012; Nieuwenhuis et al., 2017; Odgers et al., 2015; Piera Pi-Sunyer et al., 2023; Pinchak & Swisher, 2022; Sorhagen & Wurster, 2017). Similar findings emerge when neighborhood-level gentrification or income inequality is the independent variable of interest (Dragan et al., 2019; Leer et al., 2024; Pabayo et al., 2014, 2016; Vilhjalmsdottir et al., 2016, 2018; Were et al., 2025). Most of the evidence is correlational, but experimental evidence comes from Moving to Opportunity (MTO), in which randomly selected families living in public housing were experimentally offered vouchers to move to lower-poverty neighborhoods. Moving from a high-poverty neighborhood to a lower-poverty neighborhood increased antisocial behavior among boys. Girls experienced mental health benefits, and as described below, long-term effects on economic mobility were positive (Chetty et al., 2016; Kling et al., 2007).

Effects on education outcomes are inconsistent. Some evidence suggests that attending schools where most students are from high-SES background has a negative effect on academic outcomes among youth from low-SES households (Crosnoe, 2009; Esposito & Villaseñor, 2019; Owens, 2010; Sempé & Esposito, 2025). Other studies find that exposure to higher-SES students strengthens academic attainment, but only for youth from non-poor backgrounds (Klugman & Lee, 2019; Leer, 2025). For instance, living in a gentrifying (versus non-gentrifying) neighborhood was positively associated with education outcomes among White youth from non-poor backgrounds, but no effects were observed for racially minoritized youth or those from economically disadvantaged households (Leer, 2025). The potential benefits of economic integration (e.g., via exposure to education role models and information networks) may be concentrated among youth from relatively advantaged backgrounds.

Although the short-term educational implications of economic integration are less clear, compelling evidence suggests that exposure to higher-SES neighborhood peers supports upward economic mobility in adulthood (Chetty et al., 2016, 2026). The MTO study found that children who were younger than 13 years old when their family moved to a lower poverty neighborhood had higher earnings in adulthood (Chetty et al., 2016). Additionally, recent analyses of the Housing Opportunities for People Everywhere (HOPE VI) program found positive effects of growing up in a mixed-income neighborhood on future earnings and educational attainment (Chetty et al., 2026). HOPE VI invested $17 billion to revitalize 262 large and highly distressed public housing developments, turning them into mixed-income developments with a mix of market-rate and subsidized units. Children who moved into the new developments earned 16% more and were 17% more likely to attend college compared to the comparison group of non-revitalized matched control projects that (Chetty et al., 2026). Further, treatment effects were larger for subgroups with more affluent peers in the surrounding neighborhood, and children interacting with the lowest-income peers showed no effects; suggesting that social interactions with higher-income peers drove the effects (Chetty et al., 2026).

Youth's Subjective Understanding of the Social Hierarchy Shapes Experiences in Mixed-Income Settings

Youth's perceptions of how their own status compares to that of their peers, termed subjective social status (SSS) are highly predictive of mental and behavioral health outcomes, often more so than objective measures of SES, such as household income or parent educational attainment (Davisson et al., 2025; Goodman et al., 2007; Rivenbark et al., 2020). Mixed-income settings may increase upward social comparisons, making one feel poorer in the shadow of wealth. Indeed, downward shifts in SSS are one of the main mechanisms hypothesized to explain negative short-term effects of mixed-income settings on mental and behavioral health (Kim, 2020; Leer et al., 2024; Sorhagen & Wurster, 2017). This suggests that helping young people maintain a strong sense of self-worth and belonging in mixed-income settings may buffer against the potential mental health risks associated with upward social comparison.

In addition to shifting how youth think about their place in the social hierarchy, mixed-income settings have the potential to shape beliefs about societal fairness and (in)equality. Adolescents (and adults) across all SES groups tend to endorse system-justifying beliefs: the idea that society is generally fair, that anyone can get ahead (Jost & Banaji, 1994; Lanteri et al., 2025). System-justifying beliefs can be a tool to cope with stress and motivate action, but for marginalized groups, believing in a just world conflicts with the awareness that one's own social group has a lower status and is afforded fewer societal resources (Godfrey, Burson, et al., 2019; Godfrey, Santos, et al., 2019). Youth in mixed-income contexts are likely to experience this conflict between believing in a fair system versus seeing everyday examples of inequality. Indeed, qualitative research with youth in Chicago found that those from disadvantaged neighborhoods experienced a deteriorated sense of justice when attending schools with a greater proportion of higher-SES peers (Shedd, 2015). Meritocratic beliefs, which emphasize that anyone can get ahead through hard work and perseverance, can also result in a similar set of tensions for youth from lower-SES backgrounds (Brummelman & Sedikides, 2023). Supporting youth to address this tension may help protect against the potential negative effects of mixed-income settings on mental and behavioral health.

Benefits Depend on Positive Cross-SES Relationships, Which do not Happen Automatically

Rather than mere exposure to higher-SES peers, positive cross-SES relationships are needed to support academic outcomes and upward economic mobility among youth from lower-SES backgrounds (Chetty et al., 2022, 2026; Lessard & Juvonen, 2019). Yet, even in mixed-income settings, such relationships are relatively rare. For example, social network data from a sample of Californian sixth graders attending mixed-income schools found only about half of the sample had any cross-class friendships (Lessard & Juvonen, 2019).

In line with the racialized nature of social class disparities, cross-SES relationships are shaped by the racial dynamics of the social setting and children's own racial identity. Qualitative studies of mixed-income communities found that racism-related stereotypes limited the formation of cross-SES friendships among youth and parents (Chaskin & Joseph, 2015; Khare et al., 2015; Tach, 2014). Additionally, research consistently finds that the effects of living in a gentrifying neighborhood on health and education outcomes vary across racial groups and according to the racialized nature of neighborhood change (Beck et al., 2022; Leer, 2025; Pearman & Steyer, 2023). For example, increased exposure to higher-SES households via gentrification was positively associated with Black youths’ education outcomes so long as gentrification did not result in the whitening of historically Black neighborhoods (Leer, 2025; Pearman & Steyer, 2023). These findings suggest that the potential benefits of economic integration require intentional efforts to facilitate positive connections across multiple intersecting features of identity.

Cross-SES Exposure Occurs Online, not Just in Schools and Neighborhoods

Many adolescents spend more time online than in a classroom or outside in their neighborhoods. The majority of U.S. teens use social media platforms such as Instagram, YouTube, and TikTok at least daily, and these platforms connect young people to peers and networks that are not bound by geography (Pew Research Center, 2025). Social media platforms allow the sharing of posts, videos, and images that broadcast access to material goods and experiences in ways that facilitate upward social comparisons, which could lead to heightened feelings of disadvantage and deprivation (McComb et al., 2023). Some evidence suggests that young people who spend more time on social media platforms are more likely to experience relative deprivation (Park & Park, 2024). However, recent large-scale research among adults shows that while high social media users report higher relative deprivation, within-person changes in social media use do not predict changes in relative deprivation over time (Lilly et al., 2023). Given the central role that online experiences play in adolescents’ lives, more research is needed to understand the nature and effects of online cross-SES interactions. Additionally, many vulnerable young people report finding supportive communities online, so it will be important to test whether these connections could serve to buffer the negative impacts of offline exclusion. The role of digital environments is an understudied yet potentially crucial area to explore in the context of economic integration.

Policy Recommendations

We outline six strategies to help amplify the benefits of economic integration and avoid negative effects on mental and behavioral health.

1. Keep it local. Direct exposure to cross-SES peers via repeated unplanned interactions is a necessary (yet insufficient) step toward forming positive intergroup relationships. To increase the likelihood of such interactions, policies should integrate immediate proximal environments. This means creating mixed-income classrooms, not schools or districts, and mixed-income neighborhoods (e.g., block faces), not zip codes or metro areas. This point is worth emphasizing because many policy approaches that are ostensibly designed to create mixed-income communities do not require integration to happen at a local level. For example, inclusionary zoning policies encourage or require developers to create affordable units for lower-income households when market-rate homes are developed, but developers can often pay a fee instead or build affordable housing offsite (Wang & Balachandran, 2023).

2. Encourage collaboration between housing and education agencies. Coordination between housing and education sectors is necessary to ensure opportunities for cross-class connections exist across multiple settings. As one example, the federal Choice Neighborhood Initiative (CNI) aims to support neighborhood-wide access to opportunity. Despite this goal, schools serving CNI neighborhoods have remain largely segregated except when there is active cross-sector coordination (Tegeler & Gevarter, 2021). In a CNI neighborhood in San Francisco, California, the local middle school serving the public housing development was replaced with a state-of-the art campus, and students were given automatic preference for the most competitive high schools in the city. This ensured that the local neighborhood schools were attractive to families across income groups, leading to schools that matched the economic diversity of their neighborhood (Tegeler & Gevarter, 2021).

3. Invest in “third places,” such as parks, libraries, community centers, and online spaces. Third places are defined as settings where people spend time between home (the “first place”) and work or school (the “second place;” Butler & Diaz, 2016). Third places can foster intergroup interactions (Butler & Diaz, 2016; Lenzi et al., 2013), so long as they are designed so that people from all backgrounds feel welcome. One example are community gardens, which have been linked to increased self-esteem, agency, and optimism among youth, and may provide bridging social capital through regular cross-cultural social interactions (D’Amore et al., 2026). Third places that provide explicit opportunities for youth to work toward shared objectives (e.g., through sports or community arts projects), in a setting where authorities (e.g., coaches and educators) explicitly encourage intergroup interactions offer strong potential (Adams et al., 2020). Digital platforms are crucial third spaces, as evidenced by youths’ high engagement and time spent online. However, there is a large gap between the potential to intervene in these spaces and the investments that have been made to date in building supports, services, and connections for young people in these increasingly important third spaces (Odgers et al., 2020)

4. Avoid structural and organizational practices that result in clear class divisions. In the context of neighborhoods, this means that resources and community programs should be accessible for all income groups. During the early 2000s, mixed-income developments often included different sets of amenities and neighborhood governance boards for market rate versus subsidized residents (Chaskin et al., 2012). Such practices send the message that SES is an important marker of identity, which makes youth more likely to use SES as a category to define themselves and others and less likely to engage in positive cross-SES interactions (Bigler & Liben, 2007).

In the context of schools, practices that amplify SES differences include the sorting of students into ability-based or curriculum-focused classrooms (e.g., honors versus remedial) and pay-to-participate activities. A nationally representative survey found that as of 2018, one in six U.S. middle and high school students did not participate in extracurricular activities like sports teams or theater, and non-participation was largely due to cost barriers (Mott Poll Report, 2019). Many schools offer scholarships or fee waivers, but parents were unaware of or did not feel comfortable asking for these opportunities (Mott Poll Report, 2019). This is concerning considering that extracurricular activities are one of the best ways to foster positive cross-SES connections.

5. Support youth belonging and strengths. To offset the potential negative effects of upward social comparisons, youth need to feel that they belong in mixed-income settings and that their strengths are recognized and valued. A central goal of economic integration is to increase opportunities for upward socioeconomic mobility, but youth need strong examples of similar others succeeding. This can be facilitated through mentorship programs that connect adolescents to young adult leaders with whom they identity, who can share their path to success in a concrete and relatable way (Browman et al., 2017, 2019).

In terms of strengths, emerging research shows the value of acknowledging the unique strengths that come from growing up in economic disadvantage (Hernandez et al., 2021; Silverman et al., 2023). For example, coaching educators to effectively value students’ economically marginalized identities can have positive effects on student academic outcomes (Silverman et al., 2025). This is important because economic disadvantage is typically framed as something to be overcome, a situation to be “fixed.” In contrast, a strengths-based approach acknowledges structural barriers to socioeconomic wellbeing, while recognizing that experiences coping with and resisting structural barriers can lead to unique assets (Silverman et al., 2023). In mixed-income settings, a strengths-based approach may help counteract the negative effects of upward social comparison, helping youth maintain a strong sense of self-worth.

6. Provide opportunities to engage in collective action to redress perceived inequities. Mixed-income settings expose youth to everyday examples of in-your-face economic inequality. Adults often assume that young people are too young to understand and be affected by inequality, but this is not the case (Ruck et al., 2019). Rather than ignoring or downplaying inequality, youth benefit from working to understand and actively address perceived injustice. Support for this comes from research on critical action, defined as “participation in individual or collective action to change, challenge, and contest perceived inequity” (Diemer et al., 2021, p. 12). Critical action can be a proactive coping method to support youths’ ability to grapple with injustices (Rapa et al., 2018; Seider et al., 2019). In mixed-income communities specifically, opportunities for critical action and collective organizing around themes of food insecurity and environmental justice have been linked to improved agency and autonomy, as well as greater social connection across race, class, and age groups (Adams et al., 2020).

Conclusion

Our review underscores a central tension at the heart of policy efforts aimed at economic integration: the same environments that expand opportunity may also intensify vulnerability, particularly during adolescence. Mixed-income neighborhoods and schools hold the promise of disrupting intergenerational inequality, with compelling evidence linking exposure to higher-SES peers to upward economic mobility in adulthood. Yet these benefits are neither automatic nor evenly distributed. Proximity alone is insufficient to produce positive impacts.

Policy Insights

Evidence on how to create inclusive economically integrated spaces is only just emerging and will require strong stakeholder involvement to refine and rigorously evaluate. Youth and families, especially those from economically disadvantaged backgrounds are critical stakeholders and should be involved in further developing and testing these recommendations, with the support of policy makers, practitioners, and advocates in urban planning, housing, public health, and education. The benefits of economic integration, in terms of future incomes for low-income youth, are substantially larger than the upfront costs involved in creating a mixed-income community (Chetty et al., 2026). However, concerted cross-sectoral effort is needed to maximize these benefits and avoid potential costs to mental and behavioral health.

Without intentional design, mixed-income settings may reproduce the very divisions they seek to overcome. Achieving the promise of policies aimed at increasing economic integration is likely to depend on the presence of meaningful cross-SES relationships and sustained, structured opportunities for interaction that attend to multiple dimensions of identity. Moreover, policy efforts that operate at broad geographic levels without fostering local, day-to-day integration are unlikely to realize their intended benefits. To maximize the benefits of economic integration and avoid the potential mental health costs, policies should integrate at a local level, align housing and education policies, invest in inclusive physical and digital third places, and support youth belonging, strengths, and agency to redress inequality.

Moving forward, it is critical for policymakers, researchers, and youth themselves to co-design and rigorously evaluate strategies to foster inclusive mixed-income neighborhoods and schools. Additionally, to strengthen public support for economic integration, there is a need to understand the potential benefits of mixed-income spaces for all youth, including those from middle- and high-SES backgrounds. The challenge ahead is not simply to integrate spaces, but to cultivate environments in which all young people can thrive across difference.

Footnotes

ORCID iD

Jane Leer

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

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