Goldman Sachs Talks Harvard’s Raj Chetty on upward mobility in America
May 19, 2025
Raj Chetty, a leading economist and director of Opportunity Insights at Harvard, dives into the complex factors influencing economic mobility in America. He highlights how big data can uncover disparities in opportunities and the impact of socio-economic backgrounds on a child's success. Chetty discusses innovative solutions to bridge the opportunity gap, the role of social capital, and the need for reevaluating traditional education paths. He also examines local initiatives in places like Charlotte that are fostering meaningful change despite systemic challenges.
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Decline of the American Dream
- The American Dream of upward mobility has declined dramatically since 1940, falling from 92% to about 50%.
- This decline underlies much current social frustration and political populism in areas with low mobility.
Upward Mobility Varies Locally
- Economic mobility varies widely even within cities, differing between neighborhoods just miles apart.
- This shows that opportunity depends on localized factors such as schools, social networks, and community characteristics.
Social Capital Drives Mobility
- Cross-class social connections strongly predict upward mobility for low-income children.
- Places where low-income kids have more high-income friends have much higher rates of economic mobility.
