Restoring the “American Dream” for All Children

March 4, 2021

By Sonia He, Duke undergraduate student ’22

“The United States is no longer a place where children can get ahead of their parents.”

The “American Dream,” coined in 1931 by writer James Truslow Adams, inspires children from all walks of life. To some, this signifies upward mobility—the idea that through hard work, one can go on to earn more money than one’s parents. However, America has failed to live up to these aspirations for many children—over the past 50 years, children’s chances of earning more than their parents have declined from 90 percent to 50 percent. Upon closer look, a map of upward mobility trends across the U.S. shows that this dream also depends heavily on where one grew up—low-income children from the Midwest experience significantly greater upward mobility than those from the Southeast.

Thus, the question is: How can we increase economic opportunity for children from neighborhoods with low upward mobility? The Duke Center for Child and Family Policy in collaboration with the Duke University Population Research Institute hosted Dr. Raj Chetty, William A. Ackman Professor of Economics at Harvard University, to share research findings from his work with colleagues at Opportunity Insights, using big data to address this issue. The February 24 event was part of the Sulzberger Distinguished Lecture Series, made possible through an endowment from the Arthur Sulzberger Family.

First, Dr. Chetty analyzed four characteristics that seem to drive the variation across areas in the U.S.: 1) poverty rates, 2) stability of the family structure in the community, 3) social capital, and 4) school quality. Essentially, the immediate environment in which a child lives until the age of 23 significantly affects their prospects for upward job mobility.

What about an area’s racial composition? The same map filtered by race shows that Black men earn significantly less than White men in every area across the U.S. Dr. Chetty summarizes,

It’s essentially like there are two different countries in terms of economic opportunity for Black men versus White men… for Black Americans, [achieving the American Dream is] more like being on a treadmill where even after you climb up in one generation, there are tremendous structural forces that push you back down and make you have to make the climb again.

However, despite the inter-race differences, there are still substantial variations within the same race and within the same city.

Take Durham, North Carolina, for example. In Durham’s Central Park neighborhood on the east side of the city, the average income for Black men from low-income families is just $6,900. Just a few miles to the west in Duke Forest, the average income increases to $22,000. The problem is “hyper-local,” as Dr. Chetty likes to call it. And because the problem is local, the solution must also be local.

Dr. Chetty suggested ways in which policymakers can use this data to increase economic opportunity in their communities, including at higher-education institutions. Colleges have the power to propel their low-income students to the top of the income distribution. Duke University ranks among the top in increasing student’s prospects of upward mobility; approximately half of its students who come from the bottom 20 percent of the income distribution end up reaching the top 20 percent. However, Duke enrolls a relatively low number of low-income students. Thus, to increase its contributions to increasing upward mobility, Duke must prioritize increasing access to qualified low-income students by admitting greater numbers of high-achieving, low-income students as well as transfer students from community colleges, according to Chetty.

Dr. Chetty concluded his talk by describing the disparate impacts that the COVID-19 pandemic has had on economic opportunity. But while the COVID-19 pandemic has negatively disrupted our lives in many ways, Dr. Chetty inspired attendees to reflect on changes we can make to come out stronger and restore the American Dream for all children.

“Coming out of the Great Depression, the fundamental changes in U.S. social programs and infrastructure… led to decades of inclusive growth in the United States and some of the highest rates of economic opportunity, and I think, informed by modern data and modern science, there’s an opportunity to do that again in the United States.”

To look at some of the data and tools Dr. Chetty used in his talk, check out: https://www.opportunityatlas.org/