It’s a nice day in which neighborhood?

Is economic mobility a dream of the past? In this episode, host Russ Roberts welcomes Harvard’s Raj Chetty, an economist with a keen interest in (among other things!) the science of economic opportunity! The topic of conversation is a new study that Chetty worked on (and recently published nature) Which suggests that people with rich friends do better financially than poor people who only connect with other poor people. The project developed a measure of “social connectedness” intended to measure community-level (no personal, an important caveat) in relation to the use of Facebook data.

Roberts, always skeptical of empirical research, was surprised by the results Chetty and his colleagues found. Chetti, too, notes a departure from earlier research on social mobility in sociology and other disciplines, which have traditionally placed a more causal emphasis on factors such as faith or tight-knit communities. Chetty and company’s findings not only suggest that you should make rich friends…but it is by doing Let Chetty think about what can be done to bring more economic opportunity to more people. What other factors might be related to economic mobility? And if the answer is simple geography, why aren’t we seeing more people moving into Chetty and party-identifying neighborhoods?

What do we want to hear? you Have to say. What was your biggest takeaway from this episode? Feel free to answer any of the prompts below; Let’s continue the conversation.

1- How do Chetty and his colleagues define “connectivity” and “neighborhood effects” and how does ‘connectivity’ relate to economic mobility? To what extent does “attachment” ignore other factors (such as school standards, family structure, and parenting)?

2- Roberts thinks that Chetty’s results are simply a reflection of the problem of selection bias—that is, aspiring parents will naturally try to move to the area most advantageous for their children. How does Chetty respond and how much does she mean to you?

3- What are the main policy implications of this study? In other words, how can we build these connections and break down barriers to interaction? Chetty suggests that there is a missed opportunity in terms of how policy couples resources with social-capital, connection-type interventions that would be beneficial in his research. How can we change policy accordingly, as it accounts for social and economic support?

4- Do the results of Chetty’s research and his conversation with Russ make you more or less optimistic about the endurance of the “American Dream”? What accounts for your optimism or pessimism?

5- The conversation concludes with a discussion on the nature and importance of economic education, a topic dear to our hearts at EcoLib. What role should empirical techniques play in economic education? How does Chetty see the relationship between theory and facts? what you It seems that this relationship should be. (Note: For two alternative perspectives, you might consider this article by Nicolai Wenzel and this article by Don Boudreaux.)

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