The power of people

Yesterday I mentioned a lecture by Harvard economist Raj Chetty called “Causal Effects of Neighborhoods,” one part of a series called “Using Big Data to Solve Economic and Social Problems.” Chetty explains how he goes about understanding where, why, and how there are opportunities in economic mobility for American children.

Later on in this lecture he talks about the five largest correlations between Census data and economic mobility.

The first correlation indicates that more segregation between race and income leads to less upward mobility. That is, the less integrated and diverse the community, the less economic opportunity.

For example, Atlanta has tremendous job growth, yet it is a very segregated city, so there isn’t much opportunity for children growing up there. Here’s how the segregation looks on a map.

Conversely, there is less job growth in Sacramento, but because it’s more integrated, there’s greater opportunity for children growing up there.

However, the greatest indicator of economic mobility in the United States is a bit more surprising:

Areas with more single parents have much lower mobility. That is, less marriage means less economic opportunity.

Chetty mentions that we shouldn’t read too much into this, that it doesn’t necessarily emphasize the importance of marriage because the correlation remains even if the child’s own parents are married. The data shows that it’s more to do with the frequency of single parents in the neighborhood, not the child’s own parents or family dynamics.

I’d like to think, though, that marriage creates stability, and therefore creates opportunity. It’s one step further than Chetty’s data shows, but I suppose that finding can wait for another day.

Here are all five correlations on one slide.

Interestingly, a recent report by McKinsey Global Institute shows that if the United States closed the racial wealth gap, we would increase GDP by 4 to 6% by 2028.

By the racial wealth gap, researchers mean the gap between white families’ wealth and black and hispanic families’ wealth, where white families own over ten times the wealth of minorities.

Below is the current racial gap and what economists predict would happen to the GDP over the next decade if there were more economic equality between races.

All this data shows that what we value as a society has real economic impact for people’s everyday lives. What we value often comes from our theological worldview.

In other words, your theology impacts your world.

Thanks for reading.