Thursday, April 16, 2015

Geographical Variations in Equality of Opportunity

Raj Chetty has been leading a tremendously important and (already influential) research project on Social Mobility and the geographical variations in equality of opportunity in the US.

Among the main findings, social mobility is found to vary dramatically across US cities.  These geographical differences are correlated with five factors: segregation, income inequality, local school quality, social capital, and family structure. Check one of their papers, below. The website of the project is here, with links to interactive map/chartthe data used in the project etc.

Chetty, R., et al. (2014). Where is the land of opportunity? The geography of intergenerational mobility in the United States (No. w19843). National Bureau of Economic Research.

[image credit: Chetty et al 2014]

We use administrative records on the incomes of more than 40 million children and their parents to describe three features of intergenerational mobility in the United States. First, we characterize the joint distribution of parent and child income at the national level. The conditional expectation of child income given parent income is linear in percentile ranks. On average, a 10 percentile increase in parent income is associated with a 3.4 percentile increase in a child’s income. Second, intergenerational mobility varies substantially across areas within the U.S. For example, the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4% in Charlotte but 12.9% in San Jose. Third, we explore the factors correlated with upward mobility. High mobility areas have (1) less residential segregation, (2) less income inequality, (3) better primary schools, (4) greater social capital, and (5) greater family stability. While our descriptive analysis does not identify the causal mechanisms that determine upward mobility, the publicly available statistics on intergenerational mobility developed here can facilitate research on such mechanisms.