The American dream means a lot of things, says economist Raj Chetty, but broadly speaking it signifies equal opportunity for socioeconomic advancement. Chetty was curious if this promise of generational growth holds water, so he looked at the numbers:

Someone born in the 1940s had over a 90 percent chance of earning more than their parents, says Chetty. But that number has plummeted, and today “it’s essentially a 50-50 shot as to whether you’re going to do better than your parents.” Chetty goes on to say that even those 50 percent odds aren’t the whole picture. Some places are doing better than others, and there are clear geographic indicators that determine if the American dream is alive in your neighborhood.

When Raj Chetty displays maps of economic mobility around the country, it’s easy to think that whole states or cities are more or less upwardly mobile. Chetty says that isn’t so, and he uses an example from New York City to prove his point:

By zooming into a block-by-block map of economic mobility, Chetty shows that a city like Manhattan, which as a whole seems upwardly economic mobile, can have neighborhoods just a few blocks apart that are on opposite ends of the economic mobility spectrum. Chetty says this phenomenon shows up almost everywhere around the country, and that generalizing whole cities and states as more or less upwardly mobile erases important details.

Raj Chetty tracked young people as they moved from areas of less opportunity to areas of greater opportunity in the Seattle metro in order to better understand geography’s relationship to economic mobility. He discovered three critical takeaways: 

Chetty says that these findings should have major implications for policy makers as they try to allocate funds and resources to have the greatest impact.

The evidence is plain that geography plays a huge role in economic mobility, says Raj Chetty. The question is, why? Chetty points to four main reasons:

Although these aren’t hard and fast rules, Chetty says that lower poverty rates, more stable family structures, greater social capital, and better school quality are all strongly predictive of economic mobility within any given neighborhood.

If researchers understand the root causes of unequal economic mobility, says Chetty, they can give concrete advice to policy makers. Chetty has put together a plan to level the playing field of economic mobility, centered around three main pillars:

Reducing economic segregation (helping families move to more advantaged neighborhoods) is a comparatively straightforward solution, says Chetty, but not scalable enough to address the whole problem. To improve communities themselves, Chetty advocates for targeted, place-based investments that stay in communities. And lastly, higher education becomes a critical component of economic mobility that’s both neglected and underutilized.