New Article: Raj Chetty and Nathaniel Hendren, Ensuring the American Dream, (2022). Excerpt below:
A defining feature of the American Dream is upward mobility—the ability of all children to have a chance at economic success, no matter their background. Unfortunately, children’s chances of earning more than their parents have declined in recent decades. Whereas 90 percent of children born in 1940 grew up to earn more than their parents, only half of today’s young adults earn more than their parents did at the same age. Our research group focuses on understanding which policies can help expand economic opportunity—both in the United States and elsewhere.
The key lesson from our work to date is the importance of targeting policy interventions during childhood. Childhood matters for two reasons. First, children’s environment growing up profoundly shapes their outcomes in adulthood. Second, policies that directly expand investment in children—especially low-income children—are often the most cost-effective way to reduce intergenerational inequality.
The launch point for our analysis is the source material in the Opportunity Atlas, an interactive data set we developed that uses census and tax records to measure upward mobility for every neighborhood in the United States. Using the Opportunity Atlas, we can see that in some neighborhoods low-income children are highly upwardly mobile, while in others, children from comparable backgrounds tend to remain trapped in poverty across generations. For example, Chart 1 shows the wide range of average adult incomes for low-income children growing up across New York City. Chart 2 shows that the income in adulthood of low-income children in the Brownsville neighborhood in Brooklyn depended significantly on which side of Dumont Avenue they grew up
Poverty Law 