Narrowing Racial Gaps in Economic Mobility: A New Perspective

Recent research by Harvard economist Raj Chetty indicates that the economic prospects for Black children from low-income families have improved, while those for their white counterparts have declined. Chetty highlights that Black individuals raised in poverty are now more likely to escape it, with their average earnings at age 30 rising to approximately $22,000. This shift has contributed to a narrowing of the Black-white economic gap among children from similar socioeconomic backgrounds. Chetty attributes this positive trend for Black children to the employment landscape within their communities. He emphasizes that access to social capital—such as connections to internships and job referrals—plays a crucial role in economic mobility. In contrast, white children from low-income families are experiencing a decline in this social capital, which has hindered their chances of upward mobility. Historically, regions in America, particularly the Great Plains and parts of the Northeast, offered better opportunities for low-income white children to ascend to the middle class. However, Chetty notes that this "American dream" has diminished in these areas, leading to a more challenging environment for white children seeking economic advancement. Chetty argues that economic policy should place greater emphasis on fostering social capital alongside educational and financial resources. By addressing these disparities, there is potential to create more equitable opportunities for all children in America, regardless of their racial or economic backgrounds.