Some clarification on what he says at 1.32: people may think that there s a flaw in the reasoning there ..Lemme clarify what he tries to say there: Actually, he is right with his statistic in the way that: if it's a perfectly mobile society, the bottom one-fifth has only 20 percent chances of going to the top 20 percent because the other quantiles will also have the same probability. Which means that the bottom 20 percent, the next 20 percent all the way up to the top 20 percent, all these quantiles have the same probability of ending up in the top, which is 20 percent each.
This is brilliant! Upward mobility should be the number one priority in every politician's agenda and the only way we can do that is by education. This is such an Utopian dream but action would never be taken to address this on a serious note as it would be dismissed as an academic theory. This video reminds me of the first time I read 'Road to Serfdom'. Well done Raj! I have been following your 'The Equality of Opportunity Project' and am a huge fan!
I would recommend that to you the book "Rent Unmasked: how to save the global economy and build a sustainable future (essays in honour of Mason Gaffney). One of Professor Gaffney's important observations is that there is an inverse relationship between rising land prices and the standard of well-being of the majority of people in a society. The economics are straightforward and ought to be easy to recognize. Every parcel or tract of land has some potential annual rental value, this value determinated by natural or societally-provided locational advantages. Mason Gaffney, among others, argues that this value ought to be collected to pay for public goods and services. To the extent that it is left in private hands, the net imputed rent (or realized rent if locations held are leased to others) is capitalized into a land price. The potential to generate financial gain without having to risk investing in capital goods production is thereby encouraged. Locations are hoarded or acquired purely for speculation, driving up land prices as a capitalization of speculative rents. The result is a redistribution of income from producers to non-producing "rentier" interests.
There can be no upward mobility without downward mobility. Instead I think we should focus on increasing the standard of living of the poorest of the society. Everything else would follow.
This video is just AMAZING. How didn't this become trend? I think people really don't care about unequality... look at those numbers, who can't argue agains't it?
This is an excellent talk! I would be very interested to see this analysis conducted on net worth or wealth data. Income distribution is only part of the story. Learning how to build wealth when you come from poverty is very big hill to climb. But the data are trickier. I'm not sure if there is panel data with this info over time. My guess is that the probabilities of moving from the bottom to the top fifth of the distribution of net worth is a lot lower than 7.5%.
Inequality, we can increase the odds for income success, but I believe there's no formula to guarantee that everyone will have income success(8:48). First, my opinion, there will always be inequality, the question is what a person does with his talents, dreams and drive for income success. Second, does income solely define success, a lot of wealthy people are not happy and there's non wealthy people who enjoy life. Theres so many variables in the definition of success.
Good presentation, however, I was confused by one thing. If a family moves from Oakland to SF wouldn't they necessarily gain a higher income due to the fact that SF tends to pay higher wages which therefore explains the difference?
Correct me if I'm wrong, but I think that those average sallaries was about families who were born there. So, moving from the lower to the higher location, not always will guarantee you gonna reach that average.
A family who happens to own a residential property in San Francisco could move to Oakland and probably purchase an equal property and have an additional $300-$400,000 to invest. The statistics I have seen do not indicate that for most people the differences in compensation levels for the same level of position do not compensate the person for the higher residential property costs of living in a San Francisco or Manhattan. What individuals do is live longer distances from where they work.
@@buzzyanderson4131 You need to take into consideration the cost of living, and housing is a major cost for most households. Then, there is the effect of Proposition 13, which had the effect of imposing much higher property taxes on people who are newer buyers than on long-term residents.
I enjoyed the video Raj thank you for your hard work. I think there are a lot of factors left out that would matter significantly to the idea that policy makes should step in. Things like discipline in schools, race and out of wedlock percentages, imagagrents and their social mobility, also the Visa they came in on would be equally important, how many of these people receive government incentives, also the growing cultural difference between classes, and also IQ and social mobility. There are many other factors as well that would be very important to consider. A idea is how many of these people read in their free time? People that read in their spare time has dropped very fast over the years. When people watch this video we feel completed to do something from a policy making perspective, but I strongly believe people have to make better life decisions to move up in society.
The truth is it's hard to make those decisions to "choose" upwardly mobility when the price of higher education continues to skyrocket. I'm honestly surprised there has not been a major shift in inequality over the last 50 yrs. because of this factor alone and it's a major one. My one yr. program for Diagnostic Medical Sonography is $20,000 at a community college, it's outrageously expensive because the gov subsidizes oil companies rather than public education! It makes you think what we could be achieving as a society if we were taking a more pro-education approach, rather than a let's tax the rich as little as possible approach!
There is a whopping error here. Chetty says that the chances of someone in the bottom fifth moving to the top fifth in the US is 7.5%. He then says that the maximum value on this measure is 20%. Wrong. If all of the people in the bottom fifth rose to the top fifth, then the chances of making the leap would be 100%. The 7.5% is a proportion of all (100%) of people in the bottom fifth. If it were otherwise, then it would mean that, in Canada, way more than half of those in the top fifth began their lives in the bottom fifth, which is obviously untrue.
Indeed what Chetty says there is not correct. I suppose he was trying to point out that even with perfect mobility, we would expect that number to be 20 pct. rather than 100 pct.
THANK YOU. I kept thinking of that for like 30 min and couldn't simply figure it. And people even laughed about it... Not taking any credit from the overall aim of the Talk though, which is excellent.
Lemme clarify what he tries to say there: Actually, he is right with his statistic in the way that: if it's a perfectly mobile society, the bottom one-fifth has only 20 percent chances of going to the top 20 percent because the other quantiles will also have the same probability. Which means that the bottom 20 percent, the next 20 percent all the way up to the top 20 percent, all these quantiles have the same probability of ending up in the top, which is 20 percent each.
When one pays attention to how one's income unfavorably compares to those with higher incomes, we call that ENVY. Not a personality trait I'd encourage. If a person focuses on improving one's own income for one's own benefit, and realizes it's irrelevant that some others have a higher income, that person will enjoy life more. To the extent government policy in the other countries tends to flatten the range of incomes, there's a greater statistical liklihood of moving from the lowest fifth to the highest fifth.
With the pathetic education and lack of industry other than oil in North Dakota I find that graph hard to believe. Even more so with a $7.25 minimum wage and rising costs of housing and land: how could you possibly better yourself? I guess the real lesson was that proper environments produce people who want to better themselves.
Some clarification on what he says at 1.32: people may think that there s a flaw in the reasoning there ..Lemme clarify what he tries to say there: Actually, he is right with his statistic in the way that: if it's a perfectly mobile society, the bottom one-fifth has only 20 percent chances of going to the top 20 percent because the other quantiles will also have the same probability. Which means that the bottom 20 percent, the next 20 percent all the way up to the top 20 percent, all these quantiles have the same probability of ending up in the top, which is 20 percent each.
This is brilliant! Upward mobility should be the number one priority in every politician's agenda and the only way we can do that is by education. This is such an Utopian dream but action would never be taken to address this on a serious note as it would be dismissed as an academic theory. This video reminds me of the first time I read 'Road to Serfdom'. Well done Raj! I have been following your 'The Equality of Opportunity Project' and am a huge fan!
I would recommend that to you the book "Rent Unmasked: how to save the global economy and build a sustainable future (essays in honour of Mason Gaffney). One of Professor Gaffney's important observations is that there is an inverse relationship between rising land prices and the standard of well-being of the majority of people in a society.
The economics are straightforward and ought to be easy to recognize. Every parcel or tract of land has some potential annual rental value, this value determinated by natural or societally-provided locational advantages. Mason Gaffney, among others, argues that this value ought to be collected to pay for public goods and services. To the extent that it is left in private hands, the net imputed rent (or realized rent if locations held are leased to others) is capitalized into a land price. The potential to generate financial gain without having to risk investing in capital goods production is thereby encouraged. Locations are hoarded or acquired purely for speculation, driving up land prices as a capitalization of speculative rents. The result is a redistribution of income from producers to non-producing "rentier" interests.
There can be no upward mobility without downward mobility. Instead I think we should focus on increasing the standard of living of the poorest of the society. Everything else would follow.
This video is just AMAZING. How didn't this become trend? I think people really don't care about unequality... look at those numbers, who can't argue agains't it?
This is absolutely phenomenal, such a simply put statistic of inequality that screams for action from our policymakers.
Such remarkable conclusions from years of research! Raj Chetty is incredible.
Raj chetty be makin my American dreams come true😳🥵
🥰🥰🥰🥰
what.
This is an excellent talk! I would be very interested to see this analysis conducted on net worth or wealth data. Income distribution is only part of the story. Learning how to build wealth when you come from poverty is very big hill to climb. But the data are trickier. I'm not sure if there is panel data with this info over time. My guess is that the probabilities of moving from the bottom to the top fifth of the distribution of net worth is a lot lower than 7.5%.
Amazing
Thank you!
Inequality, we can increase the odds for income success, but I believe there's no formula to guarantee that everyone will have income success(8:48). First, my opinion, there will always be inequality, the question is what a person does with his talents, dreams and drive for income success. Second, does income solely define success, a lot of wealthy people are not happy and there's non wealthy people who enjoy life. Theres so many variables in the definition of success.
Good presentation, however, I was confused by one thing. If a family moves from Oakland to SF wouldn't they necessarily gain a higher income due to the fact that SF tends to pay higher wages which therefore explains the difference?
Correct me if I'm wrong, but I think that those average sallaries was about families who were born there. So, moving from the lower to the higher location, not always will guarantee you gonna reach that average.
A family who happens to own a residential property in San Francisco could move to Oakland and probably purchase an equal property and have an additional $300-$400,000 to invest. The statistics I have seen do not indicate that for most people the differences in compensation levels for the same level of position do not compensate the person for the higher residential property costs of living in a San Francisco or Manhattan. What individuals do is live longer distances from where they work.
Are there poor homeowners in California?
@@buzzyanderson4131 You need to take into consideration the cost of living, and housing is a major cost for most households. Then, there is the effect of Proposition 13, which had the effect of imposing much higher property taxes on people who are newer buyers than on long-term residents.
Edward Dodson yikes
Interesting
I enjoyed the video Raj thank you for your hard work. I think there are a lot of factors left out that would matter significantly to the idea that policy makes should step in. Things like discipline in schools, race and out of wedlock percentages, imagagrents and their social mobility, also the Visa they came in on would be equally important, how many of these people receive government incentives, also the growing cultural difference between classes, and also IQ and social mobility.
There are many other factors as well that would be very important to consider. A idea is how many of these people read in their free time? People that read in their spare time has dropped very fast over the years.
When people watch this video we feel completed to do something from a policy making perspective, but I strongly believe people have to make better life decisions to move up in society.
The truth is it's hard to make those decisions to "choose" upwardly mobility when the price of higher education continues to skyrocket. I'm honestly surprised there has not been a major shift in inequality over the last 50 yrs. because of this factor alone and it's a major one. My one yr. program for Diagnostic Medical Sonography is $20,000 at a community college, it's outrageously expensive because the gov subsidizes oil companies rather than public education! It makes you think what we could be achieving as a society if we were taking a more pro-education approach, rather than a let's tax the rich as little as possible approach!
There is a whopping error here. Chetty says that the chances of someone in the bottom fifth moving to the top fifth in the US is 7.5%. He then says that the maximum value on this measure is 20%. Wrong. If all of the people in the bottom fifth rose to the top fifth, then the chances of making the leap would be 100%. The 7.5% is a proportion of all (100%) of people in the bottom fifth. If it were otherwise, then it would mean that, in Canada, way more than half of those in the top fifth began their lives in the bottom fifth, which is obviously untrue.
Indeed what Chetty says there is not correct. I suppose he was trying to point out that even with perfect mobility, we would expect that number to be 20 pct. rather than 100 pct.
THANK YOU. I kept thinking of that for like 30 min and couldn't simply figure it. And people even laughed about it...
Not taking any credit from the overall aim of the Talk though, which is excellent.
Lemme clarify what he tries to say there: Actually, he is right with his statistic in the way that: if it's a perfectly mobile society, the bottom one-fifth has only 20 percent chances of going to the top 20 percent because the other quantiles will also have the same probability. Which means that the bottom 20 percent, the next 20 percent all the way up to the top 20 percent, all these quantiles have the same probability of ending up in the top, which is 20 percent each.
It's called the american dream because you need to be asleep to believe in it.
A wise man, 2005.
When one pays attention to how one's income unfavorably compares to those with higher incomes, we call that ENVY. Not a personality trait I'd encourage. If a person focuses on improving one's own income for one's own benefit, and realizes it's irrelevant that some others have a higher income, that person will enjoy life more. To the extent government policy in the other countries tends to flatten the range of incomes, there's a greater statistical liklihood of moving from the lowest fifth to the highest fifth.
With the pathetic education and lack of industry other than oil in North Dakota I find that graph hard to believe. Even more so with a $7.25 minimum wage and rising costs of housing and land: how could you possibly better yourself?
I guess the real lesson was that proper environments produce people who want to better themselves.
You get an EDUCATION and MOVE out of Da Hood!!!