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Improving economic mobility is a central goal for public policy. But how? Mobility is a complex, multidimensional issue, related to policies in education and training, housing markets, safety net efficacy, family stability, the labor market and much more. The latest Opportunity Insights report from Raj Chetty and colleagues[1] suggests that one ingredient that may trump all the others: Friends.
Drawing on a massive dataset, comprising the social networks of 72.2 million users of Facebook aged between 25 and 44 years, Chetty and his team are able to assess how far social networks influence economic mobility. The richness of their data permits analysis at a very granular level, down not only to zip codes, but individual colleges and high schools. Their two papers Social Capital I: measurement and associations with economic mobility and Social Capital II: determinants of economic connectedness have just been published in Nature along with supplementary data here and here. As usual they have also created an interactive and public use version of the data.
The findings are striking and certain to have a profound impact on discussions of economic mobility. The headline finding is that at the community level, cross-class connections boost social mobility more than anything else, including racial segregation, economic inequality, educational outcomes, and family structure.
Creating more connections across class lines – either through greater economic integration of our institutions and neighborhoods or more opportunities for cross-class social engagement – looks to be the most promising route to improving rates of upward economic mobility in the U.S.
Here we summarize seven key findings from the research, as well as some implications for policy. Watch a discussion this Wednesday with Chetty and Stroebel, as well as Harvard’s Robert Putnam, AEI’s Scott Winship, and our colleague Camille Busette.
As the team notes, there is an almost linear relationship between the SES of an individual and the average SES of their friends:
“A one percentile point increase in one’s own SES rank is associated with a 0.44 percentile point increase in the SES rank of one’s friends on average. The relationship is almost linear between the 10th and 90th percentiles of the SES distribution, with a slope of 0.41 in that range. The slope rises to 0.98 between the 90th and 100th percentiles, which shows that the highest-SES individuals tend to have particularly high-SES friends.”
2. Rich people make friends of college classmates, poorer people make friends of neighbors
There are also marked class differences in how and where people make friends. For high-SES people, college plays a much bigger role in the creation of friendship networks – mostly for the obvious reason that they are more likely to have gone to college in the first place:
Sources: Social capital II: determinants of economic connectedness
For those from working class or middle-class backgrounds, neighborhood networks are much more important, followed by religious communities. As the team writes:
“Individuals with the lowest SES make about four times greater a share of their friends in their neighborhoods (residential ZIP codes) compared with individuals with the highest SES…Neighborhoods therefore play a larger role in defining the social communities of low-SES individuals, perhaps explaining why where one lives matters more for the economic and health outcomes of lower-income individuals than higher-income individuals.”
3. The Midwest really is friendlier than the northeast…
There are two factors that can influence the formation of friendships across class lines:
Sources: Social capital II: determinants of economic connectedness
As they write:
“Friending bias is lower on average in areas with more high-SES exposure, with a correlation of about −0.2 across counties, but there are many exceptions to this pattern. For example, the northeast generally has high exposure but also high friending bias (that is, people with low and high SES in the northeast are relatively well integrated in schools and neighborhoods, but tend to befriend each other at lower rates).”
Drawing on a massive dataset, comprising the social networks of 72.2 million users of Facebook aged between 25 and 44 years, Chetty and his team are able to assess how far social networks influence economic mobility. The richness of their data permits analysis at a very granular level, down not only to zip codes, but individual colleges and high schools. Their two papers Social Capital I: measurement and associations with economic mobility and Social Capital II: determinants of economic connectedness have just been published in Nature along with supplementary data here and here. As usual they have also created an interactive and public use version of the data.
The findings are striking and certain to have a profound impact on discussions of economic mobility. The headline finding is that at the community level, cross-class connections boost social mobility more than anything else, including racial segregation, economic inequality, educational outcomes, and family structure.
Creating more connections across class lines – either through greater economic integration of our institutions and neighborhoods or more opportunities for cross-class social engagement – looks to be the most promising route to improving rates of upward economic mobility in the U.S.
Here we summarize seven key findings from the research, as well as some implications for policy. Watch a discussion this Wednesday with Chetty and Stroebel, as well as Harvard’s Robert Putnam, AEI’s Scott Winship, and our colleague Camille Busette.
- Friendship networks are strongly class based, especially at the top
As the team notes, there is an almost linear relationship between the SES of an individual and the average SES of their friends:
“A one percentile point increase in one’s own SES rank is associated with a 0.44 percentile point increase in the SES rank of one’s friends on average. The relationship is almost linear between the 10th and 90th percentiles of the SES distribution, with a slope of 0.41 in that range. The slope rises to 0.98 between the 90th and 100th percentiles, which shows that the highest-SES individuals tend to have particularly high-SES friends.”
2. Rich people make friends of college classmates, poorer people make friends of neighbors
There are also marked class differences in how and where people make friends. For high-SES people, college plays a much bigger role in the creation of friendship networks – mostly for the obvious reason that they are more likely to have gone to college in the first place:
For those from working class or middle-class backgrounds, neighborhood networks are much more important, followed by religious communities. As the team writes:
“Individuals with the lowest SES make about four times greater a share of their friends in their neighborhoods (residential ZIP codes) compared with individuals with the highest SES…Neighborhoods therefore play a larger role in defining the social communities of low-SES individuals, perhaps explaining why where one lives matters more for the economic and health outcomes of lower-income individuals than higher-income individuals.”
3. The Midwest really is friendlier than the northeast…
There are two factors that can influence the formation of friendships across class lines:
- lack of exposure to people of a different background (and particularly of lower-SES people to higher-SES people)
- “friending bias,” which means that even when there are people of different backgrounds around, friendships remain strongly class-based
As they write:
“Friending bias is lower on average in areas with more high-SES exposure, with a correlation of about −0.2 across counties, but there are many exceptions to this pattern. For example, the northeast generally has high exposure but also high friending bias (that is, people with low and high SES in the northeast are relatively well integrated in schools and neighborhoods, but tend to befriend each other at lower rates).”
