Are connections the missing ingredient in economic mobility?
This story first appeared as part of WFAE's EQUALibrium newsletter, exploring race and equity in the Charlotte region. Get the latest news and analysis in your inbox first by signing up here.
It’s been almost a decade since Harvard economist Raj Chetty released his report that ranked the Charlotte region 50th out of 50 for economic mobility, shocking local leaders used to the image of Charlotte as a New South boomtown brimming with opportunity for all.
Next Tuesday, Chetty — who has risen to the heights of superstardom, at least in economic and social policy research — will visit UNC Charlotte to talk about his latest work, focused on social capital. I’ll be moderating the event, and though tickets aren’t available to the general public, we’ll be livestreaming it for free on our homepage, WFAE.org.
In case you’re unfamiliar with it (unlikely, if you’ve followed the news at all in Charlotte since 2014), the original Chetty study found that a poor child born in the Charlotte region had a worse chance of rising to wealth than anywhere else in the U.S. There were a lot of nuances to the study — the South as a whole fared pretty terribly, for one, and the study examined the whole Charlotte region, not just the city, for another — but the rock-bottom ranking stuck. We were the worst.
In the aftermath of that study, local government agencies and nonprofits pledged $400 million on the areas deemed most critical to helping kids escape poverty, things like expanded pre-K and more affordable housing. And that was before the $250 million Mayor’s Racial Equity Initiative, announced in 2021.
Chetty’s research tries to explain why different communities have such vastly different rates of economic mobility. His newest studies, published last year, found that one factor appears to have a bigger impact than any other — and it’s not early childhood literacy or mentorship programs.
Instead, it’s friendship.
Specifically, friendship across economic lines. To vastly oversimplify, in places where people are only friends with those in their same economic group, there’s less economic mobility (i.e. the poor stay poor). In places with greater connections across economic lines, the opposite is true.
Again, that’s a vast oversimplification. You can find the complete research here and dig into it for yourself. To determine who is friends with whom, Chetty and his team analyzed a massive dataset: The social networks of 72.2 million Facebook users in the U.S. ages 25 to 44. (On a side note, the latest Chetty report might make digital privacy advocates worry about just how much the social media giant knows about you.)
When they examined the data, researchers found that economic connectedness — who you’re friends with and what your social network looks like — was a bigger determinant of economic mobility and earnings than whether neighborhoods were racially segregated, economically unequal, what their families looked like or how they did in school. And economic connectedness was the only kind of social capital that seemed related to economic mobility. (There are communities with tight social networks where lots of people are close friends and volunteer in the community, but those factors don’t help people climb the economic ladder, according to the study.)
Once again, Charlotte doesn’t do so well. You can see an interactive “atlas” of social capital here. In Mecklenburg County, 34.7% of low-income people’s acquaintances are high-income people. That puts the county in the bottom quarter nationwide — though again, the South as a whole looks notably bad, a sea of red splashed across Chetty’s atlas.
Because the data is so granular (and because we’ve given so much data to Facebook), you can see results at shockingly high resolution — down to individual ZIP codes or even schools. For low-income people who live in the ZIP code covering Eastover, 57% of their acquaintances were high-income people. A few miles away in southwest Charlotte near Yorkmont Road and I-77, the figure was just 27%.
And at Providence High School, 84% of low-income students’ friends were high-income people. At West Charlotte High School, it was just 18.9%.
That’s not surprising when you consider racial segregation, income inequality and other factors from this analysis. The student bodies at Providence and West Charlotte look vastly different, from majority white and high-income to majority Black and low-income. But Chetty’s point is it’s not just the segregation that’s endemic in our society that is so problematic: It’s that segregation along these lines cuts some groups off from opportunities, opportunities that they can reclaim via connections across economic lines.
There are a lot of reasons why this might translate into greater economic mobility, Chetty theorizes. “Growing up in a more connected community may improve children’s chances of rising up through a variety of mechanisms, from shaping career aspirations and norms to providing valuable information about schools and colleges to providing connections to internship and job opportunities,” he writes.
As Chetty puts it: “Place matters for mobility. But to a large extent this is because some places are more connected than others.”