Presentation: 

On June 12, 2026 at 2pm in Louvain-la-Neuve (exact location TBC) Raj Chetty will give a presentation on:
 

The Social Origins of Economic Opportunity: Theory and Evidence

Children from low-income families often have poor economic opportunities -- a fact that underlies many social and political challenges today. Canonical economic theories of income dynamics emphasize liquidity constraints in investing in human capital as the key factor that hinders upward income mobility across generations.  This talk will first present a summary of recent empirical evidence showing that social connections shape both individuals’ long-term outcomes and the peer groups people join (such as neighborhoods or schools), thereby influencing the formation of social capital itself. It will then present a new equilibrium theory of income dynamics across generations in which social capital influences both the choice of peer groups and individuals' outcomes.  The model explains several features of aggregate trends in economic inequality and mobility that are challenging to explain with existing theories. The talk will conclude by characterizing the impacts of policy interventions to promote economic mobility. The model predicts that redistributive financial transfers and loans for human capital investment have little impact on economic mobility in equilibrium. Policies that promote social integration (e.g., social support for moving to mixed-income neighborhoods) and place-based investments that increase employment among adults in low-income neighborhoods (e.g., targeted job training programs) have greater promise for expanding economic opportunity.