Raj Chetty Discusses Chicago’s Economic Mobility Gap | WBEZ
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Chicago Owns America’s Widest Racial Gap In Economic Mobility

Harvard economist Raj Chetty says that, for white Americans, achieving the American dream is like climbing an income ladder. “If you’ve climbed up in one generation, that’s basically where you’re going to start the next generation, and then you can climb up further.”

But for black Americans, and black men in particular, “it’s like being on a treadmill, where even after you’ve climbed up in one generation, there are tremendous structural forces that make it highly likely you’re going to fall back down in the next generation and then you have to make the climb again.”

Over the past few years, the Harvard professor has received nationwide attention for his work on economic mobility in the United States. He and his colleagues created a map called the Opportunity Atlas, which uses census data and income tax returns to measure Americans’ economic mobility over time in any given part of the country.

Chetty, who came to the United States at age nine, is one of the youngest professors to get tenure at Harvard. He received a MacArthur Foundation genius grant in 2012, and many say he is bound to win a Nobel prize someday.

Chetty was in town last week for the Metropolitan Planning Council’s annual luncheon, attended by hundreds of leaders including Cook County Board President Toni Preckwinkle and Chicago's housing commissioner Marisa Novara. Chetty sat down with WBEZ to discuss Chicagoans’ economic mobility, housing segregation, and more. Below is a transcript of the conversation, edited for length and clarity.

WBEZ: According to your data, Chicago is one of the worst places for black children — especially black boys — to rise up.

Chetty: The city has the biggest gap in terms of rates of upward mobility for black men growing up in low-income families relative to white men growing up in low-income families. So, to put it differently, if you’re growing up in a family earning, say, $25,000 a year, your odds of rising up are pretty good if you’re a white kid growing up in Chicago, but are extremely poor if you’re a black kid, and that gap is the biggest gap of the 50 largest cities in America. Most cities, if they’re pretty good for white men, they’re also decently good for black men. Chicago is one of those unique places where it’s quite good for white men, near the top among big cities, yet it’s near the bottom for black men.

WBEZ: Why is there such a big gap here?

Chetty: One key issue is that Chicago, as it’s well known, is an incredibly segregated city. Black kids growing up in the center of the city often in neighborhoods have very poor opportunities in terms of schools, high crime, and more broadly, a lack of access to mentoring and social capital networks that might help you rise up. It’s specifically black men who have very poor chances of rising up in Chicago; black women kind of do OK. So that suggests it might have something to do with the criminal justice system — lots of low-income black men are getting involved in crime, perhaps getting incarcerated, and then obviously have poor economic prospects after that.

Chicago is interesting because I think most people view it as an incredibly dynamic city that’s doing very well. ... And for white families, in particular, that is the case. But Chicago, despite its prosperity, is apparently also leaving a large group of people behind, confined to certain neighborhoods. I think it’s those types of places that really have an opportunity. In a place like Chicago, where you do have a lot of vibrance in terms of the overall economy, but it’s a specific group of people who are left behind, you would think there’s more of a capacity at a local level to actually do something about that. And so I think it’s a place like Chicago that could really lead the nation in trying to address these disparities for lower income families.

WBEZ: Your most recent paper, Creating Moves to Opportunity, was about a study in Seattle that aimed to help Section 8 voucher holders move to higher opportunity neighborhoods. The intervention you used was very high-touch.

Chetty: We really think that the customized search assistance is what mattered, so the people implementing the program are going to be tremendously important. [In Chetty’s study, instead of just giving residents the voucher, highly motivated caseworkers were added to the process — helping people search for apartments, providing emotional support, and even giving some financial help for down payments. The study showed that with the extra help, significantly more Section 8 residents in Seattle moved to higher opportunity neighborhoods.] We were lucky to work with a group that was extremely passionate about the problem; they were sending me text messages in the evenings and driving families around, and they really cared. It wasn’t just a job; it was actually a passion.

I actually think that is precisely what might be lacking in many government programs. We stop at thinking about the dollars and cents and the budget and don’t necessarily think about implementation. Funding is necessary, if you don’t have any funding, there’s nothing to do. But [it’s important to take] that next step to really think hard about “how do we actually make it work for families?” If we think about our own families, often there’s a parent or relative or a teacher or a friend we can point to who, above and beyond the financial resources, took an interest, who helped each of us in the paths that we followed. And I very much think of this as being a similar phenomenon.

WBEZ: Can a model like that be replicated in Chicago and other cities?

Chetty: We are actually now in the process of working with a team of collaborators to bring that pilot to Chicago in the coming year. It’s in the planning phase; funding has been secured. We’re also having conversations in New York, Charlotte, Milwaukee, and number of places across the country, as well as [the United States Department of Housing and Urban Development (HUD)]. Chicago is in the lead.

WBEZ: The study talks about helping low-income families leaving their current neighborhoods and moving to higher opportunity areas. What about the majority of low-income families who don’t have Section 8 vouchers?

Chetty: [The experiment] is a starting point. It’s these types of pilots where we can show successes if the program is actually combating segregation effectively as we’ve started to see in Seattle, that could be scaled in Chicago, that could be scaled nationally. We’re having conversations with folks at HUD, and perhaps down the road there will be appropriations for an expansion of the housing voucher program.

WBEZ: Can you talk more about place-based investments for the vast majority of residents who can’t, or won’t, move?

Chetty: [Helping move families to better neighborhoods] is a piece of what we can do. Obviously, it’s not the only solution. We should think about where affordable housing is being built in Chicago. Most developers who are building affordable housing, they’re building it in the lowest opportunity areas. That’s just an approach that’s going to amplify the persistence of poverty across generations. So we need to think about maybe how we change the low-income housing tax credit or change other policies that will change where housing is built to begin with. And then, of course, stepping beyond housing, we need to think about how we actually increase in the low-opportunity areas themselves without just having people move.

There have been tons of place-based efforts historically — lots of nonprofits and local governments have tried things like empowerment zones, Hope VI demolitions of public housing projects, investments in communities, changes in schools, things like that. The honest truth is we don't know which of those things actually work, and we don't know in a systematic way what has had an impact and what has not. And so what we’re doing is building longitudinal data where we can follow people over time and be able to precisely study when we really tried to revitalize this neighborhood, did it have an effect on the people who were already there, or did it just lead to gentrification… where new people moved in and the old people moved out and we haven’t actually achieved anything? We’re trying to figure out how you make investments that don't just lead to that. It’s in the early stages, and we’re hoping in the next year or two we’ll have something to say.

WBEZ: A lot of your work focuses on children and their outcomes over time. Why kids?

Chetty: First, when we think about America, I think one of the core principles is equality of opportunity: anybody should have the chance to rise up no matter their background. That naturally leads you to think about kids growing up in different circumstances and asking whether your family sort of determines your destiny. So that naturally leads to a focus on kids. We have also found through a series of studies that ... what really seems to matter is childhood environment. If you move to a different place as an adult that doesn’t do a whole lot for you. My colleague Nathan Hendren at Harvard has released a study recently looking at the marginal return to different types of programs at different ages — what’s the bang for the buck, basically. And he finds that programs targeted at kids have much higher rates of return for the government than programs targeted at adults. Moreover, he actually shows that a number of these programs targeted at kids pay for themselves; the tax revenue that the government ends up collecting down the road from kids earning more, more than offsets the initial cost of the program.

Giving all of our children an equal chance of succeeding is a policy issue; it should not be a political issue. Where politics does enter is what types of solutions are you gonna gravitate towards? My own view is that this is a multifaceted problem. We need a combination of solutions, some of which may be favored by different groups of people, and we want more people to come to the table and do good work on pushing it forward.

Esther Yoon-Ji Kang is a reporter for WBEZ’s Race, Class and Communities desk. Follow her on Twitter @estheryjkang.

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