Raj Chetty: Academic Works (Part 1)
A summary of Raj Chetty's academic works on upward mobility and economic opportunity, published between August 2019 and December 2017, is provided below.
Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice — August 2019
- The fact that low-income families in the US usually live in neighborhoods that offer little opportunities to improve their income, causes persistent poverty throughout generations. This happens as a result of barriers that prevent these families to move to other neighborhoods that could provide them with more opportunities.
- Researchers conducted tests that consisted in providing services to reduce those barriers, like customized search assistance, landlord engagement, and short-term financial assistance. After performing these tests in Seattle and King County, results were seen in which 54% in treatment groups "moved to high-upward-mobility areas." Researchers found that the growing economic segregation can be addressed through small changes in public policies, such as "redesigning rental assistance programs."
Do Tax Cuts Produce More Einsteins? The Impacts of Financial Incentives vs. Exposure to Innovation on the Supply of Inventors — January 2019
- This research shows how financial incentives, such as tax incentives and development grants, can affect individuals’ impulse to innovate. After using de-identified data from 1.2 million inventors (from 1996 to 2012), researchers found that the top 1% of inventors collect over 22% of total inventors' income.
- Even though lower income tax rates can increase the number of inventors, their impact on the number of innovations is small. This means that financial incentives are unlikely to increase innovation.
- They also found that it is more effective that individuals are exposed to innovation since their childhood. Researchers concluded that a better assessment of the impacts of financial incentives and the consideration of alternative policies are required to increase innovation.
The Opportunity Atlas: Mapping the Childhood Roots of Social Mobility — October 2018
- In order to find which neighborhoods in the US offer children the best possibilities to improve their income levels, researchers developed an interactive mapping tool named Opportunity Atlas. This tool locates the neighborhoods in which bad outcomes, such as poverty, normally appear. It uses anonymous data from 20 million Americans in their mid-30s and estimate their average earnings, incarceration rates, paternal income levels, etc.
- The tool is currently used to collect data and provide assistance to people that need to move to high-opportunity areas. Atlas can also be used to understand why similar neighborhoods can produce different outcomes for children and to improve programs that help children enhance their opportunities.
Race and Economic Opportunity in the United States: An Intergenerational Perspective — March 2018
- This study aimed to find racial and ethnic disparities in income in the US population. The researchers used de-identified longitudinal data from 1989 to 2015. Among their findings are that disparities vary substantially across racial groups, that differences in family characteristics (marital status, education, and wealth) do not explain that much the black-white income gap conditional on parent income, and that the black-white gap also appears among boys who grow up in the same neighborhood.
- They also found that differences in intergenerational mobility are a cause of racial disparities as black and American Indian children have “substantially lower rates of upward mobility and higher rates of downward mobility” than white children. In the other hand, Hispanics have “relatively high rates” of upward mobility and are advancing in the income distribution.
- Even though closing the gap may appear difficult, signs such as the fact that black children are not stuck at the same income levels as their parents, indicate that the problem can be solved. Finally, this research suggests that efforts such as mentoring programs for black boys, reducing racial bias among whites, and facilitating social interaction across racial groups, may be more effective in reducing the black-white gap.
Who Becomes an Inventor in America? The Importance of Exposure to Innovation — December 2017
- A study was made to “characterize the factors that determine who becomes an inventor” in the US. Researchers used de-identified data from 1.2 million inventors to track their lives from birth to adulthood. They found that children’s chances of becoming inventors depend on several characteristics, such as race, gender, and parents’ socioeconomic class.
- Other findings suggest that there are many "lost Einsteins" in the US who, had they been exposed to innovation in childhood, would have had been successful inventors. These individuals are mostly women, minorities, and children from low-income families. Researchers conclude that policies that increase exposure to innovation, such as mentoring by current inventors or internship programs at local companies, have the capacity to "increase quality-weighted aggregate innovation."
Mobility Report Cards: The Role of Colleges in Intergenerational Mobility — December 2017
- This research aimed to characterize the income distributions of parents and children at US colleges. Researchers used data from over 30 million college students from 1999 to 2013.
- Through this study, they discovered that access to colleges depends on parent income, that children from low and high-income families have similar earnings depending on the college they attend, that “rates of upward mobility differ substantially across colleges,” and that students from low-income families “fell sharply at colleges with the highest rates of bottom-to-top-quintile mobility.”
- This research helped identify lessons that could solve these issues, such as broadening the access to high-mobility-rate colleges. In conclusion, researchers advise making other efforts, such as changing admissions criteria at selective colleges, provide greater funding for colleges that generate good outcomes, or targeting “promising low-income students before they apply to college.”
The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates — December 2017
- In this study, researchers aimed to estimate the causal effect that each US county has in children’s incomes in adulthood. They did this by analyzing families who move across counties with their children. They used the data to quantify how places can be important for intergenerational mobility, develop forecasts of the causal effect of growing up in each county, and identify the areas that produce better outcomes.
- It was discovered, among other findings, that a better county increases income in adulthood by 0.5% and that counties with less poverty and lower crime rates tend to produce better outcomes for children in poor families. Researchers concluded that before doing any policy changes, it is best to estimate causal effects at narrower geographies and to understand "why some places produce better outcomes than others."
The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects — December 2017
- This research aimed to understand how US neighborhoods in which children grow up “shape their earnings, college attendance rates, and fertility and marriage patterns.” They analyzed data from over 7 million families that move across counties.
- The study found, among other facts, that the outcomes of children living with families who move to a better neighborhood improve according to the amount of time they spend in that area, at a rate of around “4% per year of exposure.” Those outcomes also depend on the age of the child.
- These results can be a motivator to improve efforts such as helping families move to higher-opportunity areas. These investments would mean identifying the causal effect of each neighborhood and understanding why some areas produce better outcomes than others.