United States

The Economist Who Would Fix the American Dream

The work that has brought Chetty such fame is an echo of his family’s history. He has pioneered an approach that uses newly available sources of government data to show how American families fare across generations, revealing striking patterns of upward mobility and stagnation. In one early study, he showed that children born in 1940 had a 90 percent chance of earning more than their parents, but for children born four decades later, that chance had fallen to 50 percent, a toss of a coin.

Equality of Opportunity

Americans believe in equal opportunity. Surveys consistently find 90% of the public agreeing that “our society should do what is necessary to make sure that everyone has an equal opportunity to succeed,” as figure 1 shows. This level of support is …

America, Land of Equal Opportunity? Still Not There

Lack of opportunity is a huge source of economic and social dissatisfaction. Income and wealth inequality aren’t pleasant, and many people want some redistribution, but most seem to accept that luck, drive and natural advantages inevitably create some degree of inequality. But when people feel like they don’t have a chance to move up in the world even if they try hard and do all the right things, that’s when they break out the rakes and pitchforks and storm the castle.

Race and Economic Opportunity in the United States: An Intergenerational Perspective

We study the sources of racial and ethnic disparities in income using de-identified longitudinal data covering nearly the entire U.S. population from 1989-2015. We document three sets of results. First, the intergenerational persistence of disparities …

The Transformation of the ‘American Dream’

“The American Dream is back.” President Trump made that claim in a speech in January. They are ringing words, but what do they mean? Language is important, but it can be slippery. Consider that the phrase, the American Dream, has changed radically through the years. Mr. Trump and Ben Carson, the secretary of housing and urban development, have suggested it involves owning a beautiful home and a roaring business, but it wasn’t always so.

The American Dream Abides

Is the American dream on life support? That’s the perennial claim of “declinists,” who are convinced that the American spirit of opportunity is at death’s door. That claim was recently bolstered by research from a team of top economists, who found that half of today’s 30-year-olds are worse off than their parents were at the same age. A closer look at that study, however, reveals that opportunity is alive and well.

Is the American Dream Really Dead?

Let’s start today with a pop quiz. Here we go: in 1970, what percentage of 30-year-olds in America earned more money than their parents had earned at that age? Adjusted for inflation, of course. That’s question No. 1. And question No. 2: what percentage of American 30-year-olds today earn more than their parents earned at age 30? I’ll give you a second to think it over. All right, you ready for the answer?

Severe Inequality Is Incompatible With the American Dream

The numbers are sobering: People born in the 1940s had a 92 percent chance of earning more than their parents did at age 30. For people born in the 1980s, by contrast, the chances were just 50-50. The finding comes from a new paper out of The Equality of Opportunity Project, a joint research effort of Harvard and Stanford led by the economist Raj Chetty. The paper puts numbers on what many have seen firsthand for years: The American dream—the ability to climb the economic ladder and achieve more than one’s parents did—is less and less a reality with every decade that goes by.

The American Dream, Quantified at Last

The phrase “American dream” was invented during the Great Depression. It comes from a popular 1931 book by the historian James Truslow Adams, who defined it as “that dream of a land in which life should be better and richer and fuller for everyone.” In the decades that followed, the dream became a reality. Thanks to rapid, widely shared economic growth, nearly all children grew up to achieve the most basic definition of a better life — earning more money and enjoying higher living standards than their parents had.

Childhood Environment and Gender Gaps in Adulthood

We show that differences in childhood environments play an important role in shaping gender gaps in adulthood by documenting three facts using population tax records for children born in the 1980s. First, gender gaps in employment rates, earnings, …