The Non-Market Response to a Market Imperfection

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In Denmark, high-income people are more likely to buy comparable quality housing and schools. But the Chinese study ignores that because it doesn't have good data on family background. And so we're back to families again. What is a neighborhood is an agglomeration of families and what families do.

Economist and Nobel Laureate James Heckman of the University of Chicago talks about inequality and economic mobility with EconTalk host Russ Roberts. Drawing on research on inequality in Denmark with Rasmus Landerso, Heckman argues that despite the efforts of the Danish welfare state to provide equal access to education, there is little difference in economic mobility between the United States and Denmark. The conversation includes a general discussion of economic mobility in the United States along with a critique of Chetty and others' work on the power of neighborhood to determine one's economic destiny.