Results for “chetty”
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Profile of Raj Chetty

By Gareth Cook, interesting and excellent throughout, here is one good bit of many:

For example, the strongest correlation is the number of intact families. The explanation seems obvious: A second parent usually means higher family income as well as more stability, a broader social network, additional emotional support, and many other intangibles. Yet children’s upward mobility was strongly correlated with two-parent families only in the neighborhood, not necessarily in their home. There are so many things the data might be trying to say. Maybe fathers in a neighborhood serve as mentors and role models? Or maybe there is no causal connection at all. Perhaps, for example, places with strong church communities help kids while also fostering strong marriages. The same kinds of questions flow from every correlation; each one may mean many things. What is cause, what is effect, and what are we missing? Chetty’s microscope has revealed a new world, but not what animates it—or how to change it.

Here is the full piece.

Raj Chetty’s empirical restructuring of Harvard’s undergraduate economics

Here is good coverage from Dylan Matthews, here is one excerpt:

[Chetty’s] Ec 1152 is an introduction to that kind of economics. There’s little discussion of supply and demand curves, of producer or consumer surplus, or other elementary concepts introduced in classes like Ec 10. There is no textbook, only a set of empirical papers. The material is relatively cutting-edge. Of the 12 papers students are required to read, 11 were released in 2010 or after. Half of the assigned papers were released in 2017 or 2018. Chetty co-authored a third of them.

Why not excerpt the cameo of me?:

…fellow traditionalist Tyler Cowen…told me he’s excited about the class. “I am for experimentation, and more of it in academia, and for that reason I approve,” he writes. “Of course it was not what I do, which is more traditional micro, more theory, less overlap with sociology. If the instructor is great, that is really what matters.”

There is much more at the link.  And here is Daniel Simonsen, Norwegian comic.

Raj Chetty is returning to Harvard

That is the word on Twitter.  Does he want grandchildren more than he used to?  You may remember my Conversation with him, a short while after he moved to Stanford:

CHETTY: So if you’re in your mid-30s, only something like a quarter or less of girls growing up in the Bay Area are married, and we show in our paper that every extra year you spend growing up in the Bay Area, you’re less likely to get married. I remember telling my wife, “I don’t think we need to worry. Our daughter will be fine in terms of earnings. It’s just that she might not be married if we move to California.”
COWEN: So, you’ve lowered your expectations for grandchildren?
CHETTY: Yes. [laughs]

The new Chetty, et.al. paper on innovation and inventors

The authors are Alex Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova, and John Van Reenen, here is the abstract:

We characterize the factors that determine who becomes an inventor in America by using deidentified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children’s propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among high-impact inventors as they are among inventors as a whole. We develop a simple model of inventors’ careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by cutting tax rates. In particular, there are many “lost Einsteins” – individuals who would have had highly impactful inventions had they been exposed to innovation.

Here is the paper, here are the slides (best place to start), here is a David Leonhardt column on it.

Florence!  Motown!  Kuna molas!  David Hume knew this!  The work looks very interesting, though I doubt if the main effect is actually channeled through absolute income, as evidenced by the immediately afore-mentioned examples.  Also, I don’t think their tax analysis quite holds up once you see intermediaries as needing to cover fixed costs for the innovators.  Taxing profits from innovation then lowers the number of potential innovators quite a bit, by discouraging investment from the intermediaries.

My Conversation with Raj Chetty

Yes, the Raj Chetty.  Here is the transcript and podcast.  As far as I can tell, this is the only coverage of Chetty that covers his entire life and career, including his upbringing, his early life, and the evolution of his career, not to mention his taste in music.  Here is one bit:

COWEN: Now your father, he’s a well-known economist, and he studied econometrics with Arnold Zellner at University of Wisconsin. At what age did he start talking to you about Bayesian econometrics?

CHETTY: [laughs]

COWEN: Which is one of his fields, right?

CHETTY: That’s right, my dad did a lot of early work in Bayesian econometrics with Arnold Zellner, and the academic environment was something I grew up with since I was a kid. I’m the last person in my family to publish a paper. My sisters are also in academia on the medical and bio side. Whether it’s statistics or thinking about scientific questions or thinking about how to change things in the world, that’s the environment in which I grew up from the youngest of ages.

We also discuss his famous papers on kindergarten teachers, social mobility, and the other topics he is best known for working on, including tax salience and corporate dividends.  My favorite part is where Chetty explains what I call “the Raj Chetty production function,” namely why he has been part of so many very successful papers, but that is hard to excerpt.  There is also this:

COWEN: In music, the group the Piano Guys, speaking of Mormons. Overrated or underrated?

CHETTY: Underrated. I love the Piano Guys.

COWEN: Why?

CHETTY: I think the Piano Guys are great in terms of doing renditions of popular songs.

COWEN: Not too triumphalist? Do you mean the major chords?

CHETTY: Maybe in some cases, but I like them.

COWEN: Bhindi or okra. Overrated or underrated?…

Self-recommending, if there ever was such a thing.

Moving to Opportunity?

But inside the lab, Chetty and his colleagues have not always practiced what their research preaches, several former employees say. When hiring for their prestigious “pre-doctoral fellowship” program, for instance, the lab uses a rubric that explicitly favors students from the very colleges that its own research has called out for reinforcing elitist systems. Opportunity Insights didn’t have its first Black pre-doc until 2021. Seven former employees who spoke to The Chronicle about their experiences were bothered by what they saw as contradictions between the lab’s practices and its stated values.

After landing the fellowship, some employees said they were also disturbed to find a culture of overwork that left them fried but feeling forced to impress in order to secure a letter of recommendation to a top Ph.D. program. For some employees, it took a toll on their health. Harvard even reviewed the lab following claims of unsustainable working hours.

That is excerpted from the (gated) Chronicle of Higher Education.

Of course I am with Chetty here, noting I have no idea how good their personnel selections are (though a priori I would be surprised if they were not very good).  In any case, once again you can see the tension between the meritocratic elements of the top schools and the rhetoric they claim to live by.  This is reaching an absurd point.  “Culture of overwork”?  C’mon people, no one has to join up.  You don’t think Chetty “overworks” very very hard?  Isn’t that exactly the opportunity on tap, admittedly not for everyone?

How about “feeling forced to impress in order to secure a letter of recommendation to a top Ph.D. program”?  I am in fact opposed to this whole pre-doc thing, but I don’t blame Chetty and co.  “Forced to impress”?  On what basis are good letters supposed to be handed out?   Are we not also “forced to impress” the people we want to date and marry?  Do start-ups with?

Someone needs to “go the full Ayn Rand” on this whole thing.  Part of the real shame is that Chetty and co. are in no real position to do that.

Denmark takes forceful measures to integrate immigrants

After they fled Iran decades ago, Nasrin Bahrampour and her husband settled in a bright public housing apartment overlooking the university city of Aarhus, Denmark. They filled it with potted plants, family photographs and Persian carpets, and raised two children there.

Now they are being forced to leave their home under a government program that effectively mandates integration in certain low-income neighborhoods where many “non-Western” immigrants live.

In practice, that means thousands of apartments will be demolished, sold to private investors or replaced with new housing catering to wealthier (and often nonimmigrant) residents, to increase the social mix.

The Danish news media has called the program “the biggest social experiment of this century.” Critics say it is “social policy with a bulldozer.”

The government says the plan is meant to dismantle “parallel societies” — which officials describe as segregated enclaves where immigrants do not participate in the wider society or learn Danish, even as they benefit from the country’s generous welfare system.

Here is more from the NYT, and do note that Singapore has its own version of this policy.  I would make a few observations:

1. Putting aside the normative, analyzing the effects of such policies will be increasingly important.  Economists are not especially well-suited to do this, nor is anyone else.  I am well aware of the Chetty “Moving to Opportunity” results.  That is good work, but a) it probably doesn’t apply to coercive Danish resettlements, and b) cultural context is likely important for the results.  At least for the countries that migrants wish to move to, most will have their own versions of this dilemma.

2. “Open Borders” as a sustainable political equilibrium is looking much weaker than it did a month ago.  The key question in immigration policy is not “how many migrants should we take in?” (a lot, I would say), but rather “how can we make continuing immigration a politically sustainable proposition?”  Many immigration advocates are in a fog about their inability to offer better answers to that question.

3. Will this Danish action, once the entire political economy is worked through, increase or decrease the allowed number of migrants to the country?  Looking at the demand side to migrate, will this policy end up attracting a higher or lower quality of migrants to Denmark?  Is Denmark even attractive enough as a destination to get away with this?  Or will it send a better signal to would-be migrants and thus raise quality?

I would not be too confident about my answers to those questions, nor should you be so confident.

Which businesses mix the classes best?

Casual restaurant chains, like Olive Garden and Applebee’s, have the largest positive impact on cross-class encounters through both scale and their diversity of visitors. Dollar stores and local pharmacies like CVS deepen isolation. Among publicly-funded spaces, libraries and parks are more redistributive than museums and historical sites. And, despite prominent restrictions on chain stores in some large US cities, chains are more class diverse than independent stores. The mix of establishments in a neighborhood is strongly associated with cross-class Facebook friendships (Chetty et al., 2022).

That is from a new paper by Maxim Massenkoff and Nathan Wilmers.  Via Scott Lincicome.

David J. Deming now has a Substack

Forked Lightning, he is from the Harvard Kennedy School, and he is a co-author on the piece with Chetty and John N. Friedman featured on MR earlier today.

In his inaugural post he explains some further results from the paper in more detail:

The second part [of the paper] shows the impact of attending an Ivy-Plus college. Do these colleges actually improve student outcomes, or are they merely cream-skimming by admitting applicants who would succeed no matter where they went to college?[2]

We focus on students who are placed on the waitlist. These students are less qualified than regular admits but more qualified than regular rejects. Crucially, the waitlist admits don’t look any different in terms of admissibility than the waitlist rejects. We verify this by showing that being admitted off the waitlist at one college doesn’t predict admission at other colleges. Intuitively, getting in off the waitlist is about class-balancing and yield management, not overall merit. The college needs an oboe player, or more students from the Mountain West, or whatever. It’s not strictly random, but it’s unrelated to future outcomes (there are a lot of technical details here that I’m skipping over, including more tests of balance in the waitlist sample – see the paper for details). We also show that we get similar results with a totally different research design that others have used in past work (see footnote 2).

Almost everyone who gets admitted off an Ivy-Plus college waitlist accepts the offer. Those who are eventually rejected go to a variety of other colleges, including other Ivy-Plus institutions. We scale our estimates to the plausible alternative of attending a state flagship public institution. In other words, we want to know how an applicant’s life outcomes would differ if they attended a place like Harvard (where I work) versus Ohio State (the college I attended – I did not apply to Harvard, but if I did I surely would have been *regular* rejected!)

We find that students admitted off the waitlist are about 60 percent more likely to have earnings in the top 1 percent of their age by age 33. They are nearly twice as likely to attend a top 10 graduate school, and they are about 3 times as likely to work in a prestigious firm such as a top research hospital, a world class university, or a highly ranked finance, law or consulting firm. Interestingly, we find only small impacts on mean earnings. This is because students attending good public universities typically do very well. They earn 80th-90th percentile incomes and attend very good but not top graduate schools.

The bottom line is that going to an Ivy-Plus college really matters, especially for high-status positions in society.

In a further Substack post, Deming explains in more detail why the classic Dale and Kruger result (that, adjusting for student quality, you can go to the lesser school) no longer holds, due to limitations in their data.  Of course all this bears on the “education as signaling” debates as well.

By the way, it took the authors more than five years to write that paper.  Deming adds: “The paper is 125 pages long. It has 25 main exhibits (6 tables and 19 figures), and another 36 appendix exhibits.”

Here is Deming’s home page.  He is a highly rated economist, yet still underrated.

The Causal Effects of Admission to Highly Selective Private Colleges

This is a long abstract, but it is meaty, and note that papers by these authors have held up well:

Leadership positions in the U.S. are disproportionately held by graduates of a few highly selective private colleges. Could such colleges — which currently have many more students from high-income families than low-income families — increase the socioeconomic diversity of America’s leaders by changing their admissions policies? We use anonymized admissions data from several private and public colleges linked to income tax records and SAT and ACT test scores to study this question. Children from families in the top 1% are more than twice as likely to attend an Ivy-Plus college (Ivy League, Stanford, MIT, Duke, and Chicago) as those from middle-class families with comparable SAT/ACT scores. Two-thirds of this gap is due to higher admissions rates for students with comparable test scores from high-income families; the remaining third is due to differences in rates of application and matriculation. In contrast, children from high-income families have no admissions advantage at flagship public colleges. The high-income admissions advantage at private colleges is driven by three factors: (1) preferences for children of alumni, (2) weight placed on non-academic credentials, which tend to be stronger for students applying from private high schools that have affluent student bodies, and (3) recruitment of athletes, who tend to come from higher-income families. Using a new research design that isolates idiosyncratic variation in admissions decisions for waitlisted applicants, we show that attending an Ivy-Plus college instead of the average highly selective public flagship institution increases students’ chances of reaching the top 1% of the earnings distribution by 60%, nearly doubles their chances of attending an elite graduate school, and triples their chances of working at a prestigious firm. Ivy-Plus colleges have much smaller causal effects on average earnings, reconciling our findings with prior work that found smaller causal effects using variation in matriculation decisions conditional on admission. Adjusting for the value-added of the colleges that students attend, the three key factors that give children from high-income families an admissions advantage are uncorrelated or negatively correlated with post-college outcomes, whereas SAT/ACT scores and academic credentials are highly predictive of post-college success. We conclude that highly selective private colleges currently amplify the persistence of privilege across generations, but could diversify the socioeconomic backgrounds of America’s leaders by changing their admissions practices.

I’ll just pull out and bold a key sentence from there:

Adjusting for the value-added of the colleges that students attend, the three key factors that give children from high-income families an admissions advantage are uncorrelated or negatively correlated with post-college outcomes, whereas SAT/ACT scores and academic credentials are highly predictive of post-college success.

It would be so easy to change all this, right?  Use scores and grades more, legacy less, extracurriculars less, and athletics less for admission purposes.  Yet so many of them won’t make that switch.  Why not?  Model that!

The NBER working paper is by Raj Chetty, David J. Deming, and John N. Friedman.  Here is some NYT coverage of the piece.