Raj Chetty

The answer to that question, Lynn, actually varies greatly across different parts of America for different subgroups.

In general, we think of the U.S.

as the land of opportunity.

But actually, if you're born to a low-income family in the U.S., on average, your odds of rising up look lower than they do in other developed countries like in Scandinavia, for example, or Canada.

But there are certain parts of America where children's chances of rising up out of poverty look better than anywhere else in the world.

For instance, much of the rural Midwest or a city like Salt Lake City, your odds of rising to the middle class or beyond, if you're born to a low income family there, are better than in Denmark, better than Sweden, better than any place in the world.

Yet there are other places in America, like much of the Southeast, cities like Cleveland, Detroit, Atlanta, where unfortunately, if you're born into poverty,

you are likely to remain trapped in poverty in the next generation at present.

There are, of course, many different things that matter, but let me highlight a few that seem central.

The first is the quality of education someone gets, as you might expect intuitively.

Having access to high-quality K-12 education, access to effective higher education is extremely important.

Second, segregation plays a really big role.

So when you live in a more integrated community where you're more exposed to high-income people, more connected to better jobs and so on, you see better outcomes for kids.

And third, and maybe most importantly, which builds on that idea of living in an integrated community, we find that social capital, who you interact with in particular, how many high-income friends you have as you're growing up,

is a very strong predictor of upward mobility.

Kids who grow up around higher income peers, who have more high income friends, who may serve as role models, connect them to internships, job opportunities, these kids tend to be much more likely to rise up in the income distribution.

When we think about poverty, often the simplest solution is, well, if someone's poor, why don't we just give them money in the form of a transfer?

And mechanically, of course, that is the most direct way to address the problem.

But I think that solution ultimately, while it's well intended and has a role, falls short as a long-term approach for a couple of reasons.

The first and simplest is that it's not really fiscally sustainable.