Harvard economist Raj Chetty wins prestigious George Ledlie Prize

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Well known economist Raj Chetty wielded big data to break myths about who achieves the American Dream and the obstacles faced by others. And for that, he was awarded the coveted George Ledlie Prize. Alongside him, Michael Springer, a biologist, was awarded the prize for racing to create a better, faster test system to help deal with the spread of COVID.

The award is given every two years to a member of the Harvard community who has, “since the last awarding of said prize, by research, discovery, or otherwise, made the most valuable contribution to science, or in any way for the benefit of mankind.”

“Mike and Raj are distinguished researchers who have greatly advanced their respective scientific fields. But they are also committed to improving the well-being of other people, now and in the future,” University Provost and Chief Academic Officer Alan M. Garber, is quoted saying in the news release posted on Harvard.edu August 9, 2023. “Mike’s research and innovation has had a profound impact on the way the University, and society at large, have responded to and managed the COVID-19 pandemic. And Raj’s groundbreaking work on economic mobility and his efforts to share this data with policymakers are making the American Dream more accessible to all.”

Chetty is the William A. Ackman Professor of Economics at Harvard University and director of Opportunity Insights, a group of economists based at Harvard who study inequality.

Using tax records that were made anonymous, Opportunity Insights constructed the Opportunity Atlas, an interactive tool that maps out economic outcomes for children across the U.S. to highlight which neighborhoods seem to offer the best chance to rise from poverty. The Atlas, which can be viewed free online, uses multigenerational data from 70,000 neighborhoods across America.

Chetty said he became interested in this work because of his own background coming to the U.S. from India with his parents when he was 9 years old. He said he saw the disparities not only between New Delhi and the U.S., but also between himself and his cousins.

“My parents, who grew up in very low-income families and villages in South India … the opportunities they had were greatly shaped by the fact that they happened to be the ones who were picked to get a higher education in their families.”

Chetty said it was common at that time in developing countries that a family would pick only one child to get advanced education because they couldn’t afford to educate all the kids.

“And it so happened to be that my mom was the one chosen in her family, and my dad was the one chosen in his family,” he said. “And I could kind of see how that’s played out through the generations in my own family, through the opportunities my cousins have had versus what I’ve had … ending up here at Harvard and the various opportunities I’ve had, I felt have stemmed from that.”

Chetty said one of the most impactful outcomes they’ve been able to observe is the role geography plays in children’s outcomes.

“There are some places in America where kids with the exact same background have much better chances of rising up,” he said. “There are other places where they look much worse. So that was interesting in and of its own right, because it teaches you something about the origins of economic opportunity, that it really matters where you grow up. It’s about your community, schools, and neighborhood.

“It speaks to the old debates about nature versus nurture and shows that nurture matters quite a bit, but environment matters quite a bit above and beyond genetics and things like that,” he added.

Chetty’s earlier work focused on the fading American Dream, neighborhood variation, and the role of childhood environment as a key driver of economic mobility. He has since gone on to explore other factors, including the role of racial disparities and social capital and connections. This has led to research on public-policy levers — reducing racial and economic segregation, investing in place-based policies, and strengthening higher education — to increase equity and opportunity.

According to Chetty, real-world impacts are being seen already from this research. For example, the Housing and Urban Development Agency has redesigned some affordable-housing policies to increase access to higher-opportunity neighborhoods, and several cities have undertaken new job-training programs as part of broader place-based initiatives.

Chetty said the recognition of his work with the Ledlie prize has meant a lot in part because of its recognition of economics as a science.