How tech and entrepreneurship can boost economic mobility
This idea — known in policy circles as economic mobility — is no fair fight. Where a child is born influences how much they'll earn well into adulthood. But these inputs can be changed, and we are beginning to better understand how.
Research from Harvard economist Raj Chetty and his Opportunity Insights team was updated last fall, and has influenced civic circles around the country. It informed a recent Federal Reserve Bank event, and the second day of the Technical.ly Builders Conference last week. At both, and many other discussions, Chetty's point was reinforced: How likely an American is to earn more in adulthood than their parents at the same age ranges widely by state, region and even neighborhood.
Nationwide economic mobility has worsened, but that simplifies a much more varied picture. Over the last generation, in much of the US Southeast and pockets of the Midwest, economic mobility has improved. In many big, older cities, it's proved much harder for someone born poor to increase their earnings than it was a generation ago.
Race, which is entwined with geography, is a strong predictor of mobility too. Asian and Hispanic children — many from immigrant families — have seen rising mobility, while it has declined for kids from low-income white families and remained stagnant or only slightly improved for Black children. Outcomes vary widely by zip code, with Black boys, along with Indigenous and Alaska Native children, experiencing some of the worst results.
Such divergence can make poverty feel intractable and capricious. In another way, such ranges can also inform how to give more of us a fair shake. Relying on tax records to compare kids born in 1978 with those born in 1992, Chetty's team isolated what they say is the 'single strongest predictor' in boosting economic mobility:
Ensuring poor, rich and middle-income households interact.
Mixed-income friendships, schools and housing are associated with significantly higher economic outcomes for children from lower-income families. Shared information resources help. Middle and higher-income kids see benefits too.
Prominent economists argue that economic mobility is a better metric to focus on than inequality, which is trickier to track than it might seem. As class mobility rises as a policymaking priority and civic good, place-based economic development leaders will be on the frontlines.
The coalition building that defines what many call ecosystem building can contribute. Rather than cloistered gatherings of experienced entrepreneurs and elite tech workers, we can strive to mix across education and income lines.
This spring marks 50 years since the Homebrew Computer Club got its start in a Menlo Park garage. The computing clubs that followed across the country gave rise to the tech meetup culture that defined so many tech communities in the 2010s. At their best, these low-cost, no-frills and informal gatherings cut across socioeconomic backgrounds by using a shared common interest in an emerging technology. When done intentionally, entrepreneurship has a similar cross-cultural pull. I've spoken about tech and startups both at high schools filled with kids from wealthy families and others filled with kids from poor families.
These topics can bring people together, when done intentionally — even when our choices in housing and schools put us farther apart.
In 2019, every one of the top 10 most popular meetups was tech and entrepreneurship related, according to an annual report from the (bewildering) company behind Meetup.com. After pandemic lockdowns in 2021, they were all friendship and outdoors related. Last year, many were still people doing sports and hobbies together — but there was a rise in groups focused on practical uses of AI. The best attended meetup of 2024 was focused on sharing tips on using ChatGPT.
Technically is trying to play a part — we've resisted a paywall for our local tech career and entrepreneurship information. Our editorial strategy aims to engage both experienced tech and startup leaders, and people who aspire to join their ranks.
Better income-integration in housing and schools would help plenty, but Chetty's research shows mixing incomes in friendships and professional relationships works too.
Not only is untapped human potential a moral wrong, but also, as argued in a 2023 Technically report, when a high-potential child underperforms we all miss out on their unrealized contributions.
So think about it. Where do you live? Where do you send your kids to school? Who are your friends? Where does your community get its news and information? Mobility isn't a mystery. It's circumstantial — and those of us with the freedom to choose can be intentional in helping it happen.
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- Technical.ly
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