Social mobility as it relates to geography, gender, integration, education and other factors is at the heart of much of the research conducted by Stanford economist Raj Chetty. An erstwhile wunderkind who’s still very young at 37, the academic, an immigrant from New Dehli whose family relocated to Milwaukee when he was a child, has often wondered what allowed his success. Certainly native genius was a key component and having a father who was an economist and mother a pulmonologist didn’t hurt, but how much did physical location and primary and secondary schools matter?  

It’s a topic I consider often not only because the American Dream has been dragging for many for decades, but because I grew up in a lower-income, blue-collar neighborhood that didn’t have a bookstore. It was hard to get from here to there, and part of the problem went beyond money, location and access, though those factors undoubtedly loomed large. The problem was also cultural, as scholarly achievements–even a mere love of reading–was viewed as a “sellout” or sorts. Don’t know if that’s still the situation where I’m from, but I bet it stubbornly persists in other quarters of the country. 

Certainly the nativism and scapegoating of the most recent Presidential election was so shockingly acceptable to so many citizens in part because of our ever-widening economic segregation. The terrible outcome of that race will likely only exacerbate the issue.

Tyler Cowen just interviewed Chetty. Three excerpts follow.

Tyler Cowen:

It’s a common view, derived from William Baumol and Bowen, that education is subject to a kind of cost disease, that it’s harder and harder to augment productivity, wages rise in other sectors of the economy, education takes a rising share of GDP but doesn’t really get much better. Do you accept that story, or, if not, how would you modify it? Are we doomed to low productivity growth in K–12 education?

Raj Chetty:

I don’t think so because, while in some limited case that might end up being true, at the moment I see so many opportunities within the US K–12 education system to potentially have significantly higher productivity without dramatically higher cost. Let me give you an example. Coming back to the case of teachers, my sense is, if we were to try to keep the most effective teachers in the classroom and either retrain or dismiss the teachers who are less effective, we could substantially increase productivity without significantly increasing cost.

Tyler Cowen:

But say we do that. What do we do next?

Raj Chetty:

I think eventually it’s conceivable that you move up the quality ladder, and you’ve got everybody getting a very good primary school education. Then you need to work on secondary education and so forth. But there again, I would say there are lots of bargains to be found.

In our most recent work looking at colleges and upward mobility, we see that there are a number of colleges where kids seem to be doing extremely well that are not all that expensive. Also, I think, here a macroeconomic perspective is useful. If you look at countries that have some of the best educational outcomes, like Scandinavian countries, they’re not actually spending dramatically more than the United States.

At some abstract level, I think that logic has to be right, that eventually, in order to raise the level of education beyond some point, we’re going to have to spend more and more on that, but I don’t think we’re close enough empirically to such a point that that is really a critical consideration at the moment.

Tyler Cowen:

If you told the story about molecules impinging on your body and impelling you to action, what’s the best story you can come up with for Iowa, say, or Utah?

Raj Chetty:

Yeah, a few different things. Iowa is known for having very good public schools for a long time.

Tyler Cowen:

But that too is arguably just part of the package.

Raj Chetty:

Yes. Where did that come from? Why does Iowa have good public schools?

Tyler Cowen:

Right.

Raj Chetty:

One of the strong correlates we find is that places that are more integrated across socioeconomic groups, that have lower segregation, tend to have better outcomes for kids. And that kind of thing in a rural area — you can see why that occurs and why it might lead to better outcomes.

If you live in a big city, it’s very easy to self-segregate in various ways. You live in a gated community, you send your kids to a private school. You essentially don’t interact with people from different socioeconomic classes. If you live in a small town in Iowa, pretty much there’s one place your kids are going to go to school. There’s one set of activities that you can all participate in. And that is likely to lead to more integration.

Tyler Cowen:

As I’m sure you know, since the 1990s, segregation by income has been rising in this country. And here, Silicon Valley is one of the most extreme cases of that. So seeing that, are you on net a segregation optimist or pessimist? If I may ask.

Raj Chetty:

I think current trends suggests that segregation will continue to grow in the US. Take the case of driverless cars, for example. One way that could go is, if you have access to driverless cars, it makes it all the more easy to go live further away in a secluded place, further reduce interaction, right?

So I think it’s very important to think about social policy in the context of that type of technology. How do you set cities up? How do you do urban planning and architecture in a way such that you don’t actually just facilitate more segregation? Such that you make it attractive to live in a more mixed-income community? That’s a key challenge, I think.•