[MUSIC PLAYING] There are many different ways in which you might think about quantifying the American dream. Is it alive or not? And one particular statistic is the odds that a child born in the bottom fifth of the income distribution reaches the top fifth of the income distribution. So think of this as a measure of kind of moving from rags to riches, really moving up in the income distribution. You can measure social mobility in many different ways, like your probability of moving from the bottom to the middle class. All of those different measures give you generally similar results. One of the great features of social science today is that we're able to harness the power of big data in much the same way that in the private sector you hear about companies like Google or Amazon using big data to improve the products that they offer, our vision is to use big data to improve public policy decisions. And so in the context of social mobility, for the first time within the past year or so, we've had access to data that's allowed us to study and really measure social mobility in the United States in a way that's unprecedented relative to the past. For children born between 1971 and 1982, we measure the correlation between their incomes and their parents' incomes in every birth cohort. So each point that you see shows you the correlation in 1971, 1972, '73 and so forth, up to '82. Kids who are entering the labor market today have just about the same chances of moving up in the income distribution as kids who were born in the 1970s. So contrary to popular perception, at the national level, it looks like social mobility is actually quite stable. Now, the important thing to keep in mind when interpreting this trend is that this is not necessarily good news, because U.S. social mobility is actually much lower, both today and in the past, than most other developed countries. So if you take a country like Denmark, for instance, or Canada, children from low-income backgrounds have twice the chance of going from the bottom to the top in those countries as they do in the U.S. One of the most fascinating patterns to me in the data is that there's a lot of difference in social mobility within the U.S. So while people typically focus on the comparisons across countries, the U.S. has less social mobility than Canada or Denmark. What's striking is that there's actually even more variation within the United States than there is variation across these countries. So in order to study variation in social mobility within the United States, we first break the U.S. into 740 areas that are called commuting zones. These are basically like metro areas, but we also divide up the rural United States into different parts. And then we ask what does social mobility look like in each of these areas? What are the odds that a child moves from the bottom fifth of the national income distribution to the top fifth based on where he or she grew up? So as you can see from this map, which illustrates social mobility across all these areas of the United States, there's a lot of variation in social mobility. So the way the map is constructed, is it's a heat map. So lighter colored areas correspond to areas with greater social mobility. You cannot have more than 20% of people in the top 20%. So the maximum you could possibly reach is 20% and places like Iowa are at 16%. They're very close to a perfectly mobile society. At the other end of the spectrum in the darkest red colors, you have places where children who are born in the bottom fifth have less than a 5% chance of reaching the top fifth. So essentially, if you're born to a low-income family in these darkest red areas, you have very low odds of escaping poverty. So the broad patterns I think that you see on this map are, first of all, that there is very large regional variation. So the southeast of the United States has very low levels of social mobility, compared to parts of the Great Plains, parts of the West Coast, and some parts of the Northeast. Urban areas tend to have much lower rates of social mobility than rural areas. And what's going on here is that kids growing up in low-income families in places like Iowa or South Dakota, North Dakota, they seem to do extremely well. But importantly, really successful kids are not staying within Iowa, South Dakota, North Dakota when they grow up. They're moving to big cities to get high-paying jobs as adults. So it's something about these rural areas that's helping low-income kids from disadvantaged backgrounds move up and succeed in other labor markets. We have studied many different factors that might be correlated with these differences in mobility across areas, and we've identified five main sets of correlates - five predictors that might be responsible for these geographic differences. First, the level of segregation in an area. So cities that are more segregated, like Atlanta, tend to have much lower levels of social mobility than cities where low and high-income families are living in closer-knit communities. The next key factor that we find predicts differences in mobility is the level of income inequality in an area. Communities with a smaller middle class tend to have lower rates of social mobility. The third factor that we find strongly predicts differences in the mobility is the quality of schools in an area. Kids from low-income families tend to do better in areas with better public schools. Fourth factor that we find is highly correlated with differences in mobility are the strength of social networks in an area. So for example, a place like Salt Lake City, which has very high levels of mobility, has a very strong Mormon church presence, which tends to bring people together. The fifth factor we find that strongly predicts differences in mobility is family structure. Areas with more single parents tend to have lower levels of social mobility. The challenge for social scientists and policymakers is to figure out how we make places like Memphis or Indianapolis, where kids from low-income families have relatively low chances of moving up in the income distribution, look like Salt Lake City or Dubuque, Iowa, where your odds of moving from the bottom fifth to the top fifth are as high as 17%, higher than any other country for which we currently have data. And so what exactly is it that is going on in Salt Lake City, in Dubuque, that's helping those kids from disadvantaged backgrounds really succeed? If we can find out that secret recipe and apply it everywhere else in the U.S., we would dramatically transform American society. [MUSIC PLAYING]