Harvard’s Raj Chetty discusses his team’s latest study on economic mobility and the role of race and class. Scroll below for our initial reaction to the study and comments. The study finds that parents’ employment patterns and community factors are key to economic outcomes of their children. Panelist Robert Doar, president of the American Enterprise Institute, which emphasizes the importance of the culture of work in fighting poverty, today questioned the value of transfer payments that provide economic support if they undermine work incentives. This is a key issue in debate in Congress over expansion of the child tax credit, which is now very regressive, to include more low-income families. Conservatives may play on the study’s emphasis on community networks and social factors as keys in economic mobility to attack economic assistance for the poor.
As we noted below, policymakers should approach with caution the study’s conclusion that “(s)ocial interactions, as opposed to changes in economic resources, have a greater impact on children’s outcomes.” That should remain a hypothesis and be explored further. Social and community factors in the study’s research design are less clear and fitted to what government can change than economic factors. Overlapping social and economic variables and analysis of changes between points in time also make determining causation difficult. Discounting the role of economic factors in order to promote social research could be used by conservatives to stifle efforts to help low-income people. Unlike sophisticated statistical analysis, policymaking is a blunt instrument. Politicians and governments are better at allocating funds than building community and family support systems. That is important work that needs to happen as well.