## Harvard Economist Raj Chetty on Social Mobility and Big Data

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**Canonical URL:** [Harvard Economist Raj Chetty on Social Mobility and Big Data](https://www.imf.org/en/publications/fandd/issues/2018/09/harvard-economist-raj-chetty-profile-people)

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## Bibliographic details
- Authors: CHRIS WELLISZ
- Published: September 1, 2018

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### Overview
- Profile of Raj Chetty, emphasizing equality of opportunity and the use of big data to study social mobility.
- Forms and leadership: Equality of Opportunity Project (with Nathaniel Hendren and John Friedman) to fund and staff large-scale research efforts and disseminate findings.

### Data and methods
- Use of administrative tax records and massive data sets to map intergenerational mobility and identify causal effects.
- Key data points and ranges:
  - Income records of 40 million children and their parents.
  - Tax records covering almost the entire US population from 1989 to 2015 (study on race and economic opportunity).
  - Scrutinized tax records for 5 million children whose families moved across counties between 1996 and 2012 (mobility quasi-experiment).
  - Study of 2.5 million New York City students (teacher value-added research).

- Methodological approaches:
  - Construction of quasi-experiments by sorting millions of tax records to compare movers between the same places at different ages.
  - Linking administrative datasets (e.g., federal tax data) to experimental and quasi-experimental designs to estimate causal effects.
  - Emphasis on plotting large datasets rather than imposing parametric functional forms.

### Major empirical findings
- Geographic disparities in upward mobility:
  - If you grew up in Charlotte, North Carolina, to parents in the bottom fifth of the income distribution, your chances of reaching the top fifth are just 4.4 percent.
  - In San Jose, California, the odds are almost three times greater.

- Effects of childhood moves:
  - Every year a child spends in a better environment—as measured by incomes of children already living there—means better earnings as an adult (based on 5 million children moving across counties between 1996 and 2012).
  - Children who moved to lower-poverty areas (under age 13) ended up earning 31 percent more than those who didn’t; they were more likely to attend college, live in better neighborhoods, and less likely to be single parents (reanalysis of Moving to Opportunity data, focusing on children under the age of 13).

- Racial disparities:
  - The income gap between blacks and whites is sizable and persists for generations; driven entirely by differences in wages and employment between black and white men, rather than women.
  - The black-white gap is much smaller for black boys who grow up in neighborhoods with lower poverty rates, low levels of racial bias among whites, and high rates of father presence among low-income blacks.
  - Study based on tax records covering almost the entire US population from 1989 to 2015.

- Education and teacher effectiveness:
  - Chetty’s testimony in Vergara v. California drew on a study of 2.5 million New York City students showing that dismissing the least effective teachers can vastly improve students’ earnings in adulthood; advocated for "value added" teacher evaluation.

### Policy recommendations and applications
- Housing and mobility policy:
  - Advocates using housing vouchers to move families to "areas of opportunity" where childhood environments increase long-term earnings, arguing long-term fiscal returns.
  - Identified "opportunity bargains" in Seattle—neighborhoods that produced good outcomes for kids and are affordable for low-income families—and working to identify such areas nationwide.
  - Notes federal affordable housing spending of $45 billion a year and suggests funds could be used more effectively to improve outcomes for children.

- Research dissemination and implementation:
  - Makes articles available online with accessible summaries; cultivates relationships with journalists and local policymakers to bridge research and policy.
  - Created alliances (e.g., Creating Moves to Opportunity) with housing authorities to apply research findings and test model voucher programs.

### Reception, collaborations, and influence
- Recognitions and roles:
  - MacArthur Foundation fellowship recipient and John Bates Clark Medal winner.
  - Moved from Harvard to Stanford and later back to Harvard; works with Nathaniel Hendren, John Friedman, Emmanuel Saez, Patrick Kline, Lawrence Katz, and others.
  - Equality of Opportunity Project employs more than a dozen pre-doc research assistants who disseminate methods and findings across academia.

- Cross-ideological appeal:
  - Emphasis on equality of opportunity resonates across the political spectrum; argued to be less divisive than redistributive policies.
  - Studies used by housing authorities and policy practitioners to redesign voucher allocation and target "areas of opportunity."

### Biography and motivations
- Personal background and trajectory:
  - Born in India; family moved to the United States when he was 9.
  - At 17, valedictorian of the University School of Milwaukee; admitted to Harvard College; graduated in three years and earned a PhD in another three.
  - At age 29 became one of the youngest-ever tenured professors of economics at Harvard; moved to Stanford in 2015, later returned to Harvard.
  - At age 39, combines a scientific, data-driven approach with outreach and public communication.

- Intellectual motivation:
  - Frustration with small datasets and fragile empirical results led to pursuit of massive administrative datasets (including Austria and Denmark data and later IRS tax data).
  - Seeks to map and quantify opportunity visually and causally so results can inform policy with less ideological resistance.

### Controversies and open debates
- Moving to Opportunity vs. Chetty findings:
  - Chetty’s reanalysis found strong positive effects for children who moved under age 13, countering original Moving to Opportunity conclusions that showed no earnings/employment gains for families who moved.
- Teacher evaluation debates:
  - Advocacy for value-added teacher evaluation in Vergara v. California generated fierce opposition from teachers’ unions; methodological disputes remain (e.g., critiques by Jesse Rothstein), though the debate is characterized as "fruitful."

### Ongoing questions and research agenda
- Central question: "We know that environment matters, but what exactly is the recipe for how we generate better outcomes?"
- Continued work to identify causal mechanisms behind neighborhoods that "spark opportunity" and to scale policy interventions that replicate effective environments for children.

*F&D Magazine — CHRIS WELLISZ, September 2018*

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_Source: https://www.imf.org/en/publications/fandd/issues/2018/09/harvard-economist-raj-chetty-profile-people_