Raj Chetty's Surprising New Insights On How Children Succeed

Capitalisn't

University of Chicago Podcast Network

Stigler Center, Chicago Booth, Socialism, Antitrust, University Of Chicago Podcast Network, Growth, 087667, Policy, Monopoly, Professors, Distortion, Research, Competition, Capitalisnt, Inequality, Promarket, Politics, Policymaking, Special Interest, Economics, Efficiency, Regulations, Chicago, Business, Markets, University Of Chicago, Kate Waldock, Capitalism, Friction, Bethany Mclean, Government, Macroeconomics, News, Education, Waldock, Georgetown, Microeconomics, Luigi Zingales, Zingales, Finance, Ucpn

4.5 • 584 Ratings

🗓️ 29 August 2024

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

Is race a more consequential determinant of social mobility than class? How and under what circumstances do Americans move up the economic ladder? For years, Harvard economist Raj Chetty has leveraged big data to answer these questions. In his recent paper, Chetty and his team show that Black millennials born to low-income parents have more quickly risen up the economic ladder than previous Black generations, whereas their white counterparts have fared worse than previous low-income white generations. That said, Chetty finds little movement in or out of the top income brackets and that the income gap between Black and white Americans remains large. Chetty joins Bethany and Luigi to discuss these new insights as well as why mobility matters, what costs come in the pursuit of bolstering mobility, and how other factors such as parenting, gender, and social capital factor into the equation. What policies should America pursue, especially against the backdrop of the 2024 presidential election, where many conservatives argue that white working-class Americans are falling behind and liberals argue that Black and brown Americans continue to face systemic inequalities?

Transcript

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0:00.0	There is still an enormous divide in terms of where black kids and white kids end up, even
0:04.6	conditional critically, on being of the same class.
0:07.8	And so I wouldn't want our most recent study to be interpreted as saying it's now only class
0:13.1	that matters and race is much less important.
0:15.9	Directionally that is true.
0:17.5	If you project forward, that's going to be just a key dividing line in the United States.
0:24.5	I'm Bethany McLean.
0:26.1	Did you ever have a moment of doubt about capitalism and whether greed's a good idea?
0:31.4	And I'm Luigi Zengales.
0:32.7	We have socialism for the very rich, rugged individualism for the poor.
0:38.3	And Mrs. Capital Isn't, a podcast about what is working in capitalism.
0:42.2	First of all, tell me, is there some society you know that doesn't run on greed?
0:46.7	And most importantly, what isn't?
0:48.7	We ought to do better by the people that get left behind.
0:51.6	I don't think we shouldn't kill the capital system in the process.
0:55.4	Even to me, a non-economist horrors, Raj Chetty is almost a household name. He's an economics professor
1:01.7	at Harvard and the director of Opportunity Insights, which uses big data to study economic mobility.
1:07.7	How and under what circumstances do children move up the income ladder and make it to a
1:12.7	higher rung than their parents? And if they don't, what can we do differently? For people who are not
1:17.5	aware, he has access to the IRS, our tax record, is the anonymized. So he doesn't know how much
1:25.8	you and I make, Bethany, but he can use this data
1:29.2	to actually see how children of people with a certain income are behaving 30 or 40 years later.
	...

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