International Conference on Societies of Opportunity
Date:
Tue 29 Apr 2025 0945h
Singapore MSF International Conference on Societies of Opportunity
Speakers — Raj Chetty, Danny Quah
Venue — Sands Expo and Convention Centre
Location — Singapore
Raj Chetty and I each delivered keynote lectures at the International Conference on Societies of Opportunity, organized by Singapore’s Ministry for Social and Family Development. Raj spoke on how he and his team have been using Big Data to expand economic opportunity: They have provided science and policy striking evidence that social networks matter importantly for individuals’ lifetime arc of economic achievement. Geographical neighborhoods matter too, down to the level of the side of the street in which one grows up.
It is a profound scientific advance that policymakers and researchers can now target the improvement of individual well-being using such granular details. This is a significant development for poverty alleviation and for ensuring no one is left behind.
In my own lecture, I noted how improving individual life trajectories is both a central goal and a critical input into social mobility in general. But these two dimensions are also different in both logic and practice. Like inequality, social mobility is a characteristic of an entire society, not of individuals. At the same time that policy improves specific individual’s lives, it can leave social mobility unchanged or worsened. A comprehensive attack on the problem of social immobility needs to improve outcomes at both individual and aggregate levels.
Aggregate-level social mobility feeds directly into improving social cohesion, raising social capital, and increasing political stability. Social mobility reduces the likelihood of extremist populism. In an age of geostrategic competition, a nation’s social mobility, domestic cohesion, and political stability feed into that nation’s foreign policy, increasing international cooperation and strengthening multilateralism across countries. Social mobility and social cohesion enhance resilience in the face of geopolitical tumult.
Traditional thinking on social mobility at the aggregate level has focused on the so-called “Great Gatsby Curve”, a negative relationship between social mobility and inequality. The higher is inequality, the lower is social mobility. In this view, inequality is not just a social ill in itself, it also hampers social mobility. Inequality does not just signal social failure; it is responsible for the friction that prevents the talented and hardworking in society from achieving the rewards they deserve.
Such a feature is certainly seen in data. But there is another, equally powerfully present, and whose implications contrast with that of the Great Gatsby Curve.
I made two points:
One. I show in cross-country data a Growth-Mobility Curve. This is as strong an empirical feature of data as is the Great Gatsby Curve, the mobility-inequality relationship. In the Growth-Mobility Curve, past economy-wide growth foreshadows high social mobility. Even if economic growth comes with high inequality—and the evidence on this in the literature is mixed—the Great Gatsby effect of high inequality is more than overwhelmed by the positive impact of growth. If inequality moves apart the rungs of the economic ladder so that, all else equal, that ladder becomes harder to climb, economic growth fills in those spaces with new rungs so that social mobility improves. Economic growth not only raises incomes on average, but has additional important positive spillovers on individual well-being.
Two. Singapore’s social mobility is, objectively, among the very highest in the world. However, for characteristics such as inequality and social mobility, the difference between individual and social trajectories can magnify into unhelpful divergent expectations and psychological perception. When social mobility is already high, policy might well be impactful when it pays greater attention to providing information that resonates more with those whose lived experiences diverge from that in the actual social characteristics.