With talk of a "bull market" entering mainstream discourse, Americans should tread carefully. The U.S. economy may be showing signs of improvement, but it is still weaker post-pandemic than before it.
U.S. policymakers should focus on flourishing, not simply inequality, poverty, and disadvantage. This would entail a focus on physical and mental health, positive social relationships, freedom, meaning, agency, and an ability to live with respect and dignity to pursue goals and aspirations. Social mobility—the chance to better oneself and one's children—is an important aspect of flourishing.
But most discussions of inequality and social mobility focus narrowly on welfare policies such as child tax credits, the earned income tax credits, or on redistributive measures such as taxation and housing vouchers. Three crucial topics are underrepresented in the recent discussions: families, opportunities, and the truth about these matters.
Despite decades of sound research on the importance of the family in promoting flourishing lives, its lessons are absent from many current discussions of social mobility, as well as in our political and policy debates. Some of the most cited recent research on mobility by Raj Chetty and his team at Opportunity Insights showed that the U.S. neighborhoods and zip codes with the best social mobility scores are those with more affluent and educated parents with two-parent households. The power of place matters, but such studies neglect to show that parents choose the places where their children live and thereby fundamentally shape their lives.
Stronger studies compare family structure and parental engagement in the United States and Denmark. Denmark's welfare system provides, at no cost to individual families, most of what is thought to be essential for human flourishing in current American policy discussions: early childhood education, childcare, K-12 schooling, health care, and post-secondary education. Yet, despite access to this wish list of Bernie Sanders, Elizabeth Warren, and other progressives, family still matters most in Denmark.
Parents still chose the neighborhoods and the peers, which greatly impact flourishing. Despite Denmark's system of free education and the equal pay of teachers everywhere, teachers sort to schools based on peer and student quality, directly related to neighborhoods with more affluent and motivated parents. Payment comes in the form of active and engaged students, rather than cash.
Parental engagement is a crucial factor in developing the skills that serve as determinants of inequality, social mobility, and better opportunities later in life. Recent research showed the lasting impacts of early childhood education interventions that promote engagement and boost flourishing throughout the lives of children.
Social policy should embrace these mechanisms. Child poverty is much more about the lack of parenting and supportive family life than about cash flows to parents.
The opportunity to develop and utilize skills is essential in promoting flourishing lives. Job creation and entrepreneurship create these opportunities. A survey by the Archbridge Institute found that most Americans believe a job is the most important vehicle for climbing the income ladder. Second on the list was access to higher education, which facilitates access to jobs and higher wages. After all, the principal source of income for most people is a salary or wage.
Policymakers should move beyond focusing only on tweaks to the safety net or new welfare programs. More central to reducing inequality should also be an emphasis on business dynamism, entrepreneurship, growth, and job creation to use acquired skills. These all play vital roles in the economics of human flourishing.
Opportunities include the quality of education. Only 20 percent of Chicago's schoolchildren are proficient at national levels. Fully 55 schools have zero proficiency. Granting access to high-quality education through school choice and other programs is key to increasing opportunities and improving life outcomes. Since the Coleman Report (1966), we have known that families—more than bricks and mortar or teacher salaries—matter for making successful schools.
But skills and opportunities alone are not enough to promote flourishing lives. The dialogue about inequality also needs new terms of reference. As Virginia Lieutenant Governor Winsome Earle-Sears often says, we need to look forward and not backward to celebrate achievements of disadvantaged people, and not linger over society's past errors. People favor equality of opportunity over equality of outcomes, and rightly so. We need to equip students to seize opportunities, rather than dwell on the sins of our fathers.
We need optimistic, agentic narratives around social mobility, and human flourishing. If people are portrayed as victims and not agents of change, society does not empower people to overcome barriers that stand in the way, regardless of the opportunities out there.
Narratives matter because they shape our understanding of problems and our approach to solutions. One example is the mismeasurement of poverty in America. The prevailing point of view promotes a focus on programs like universal basic incomes and ever-growing safety nets. Consequences of problems are highlighted without identifying their root causes.
An alternative narrative moves beyond symptoms and grievances to causes. It focuses on economic dynamism—the creation of opportunities. It promotes risk-taking, achievement, and merit.
We cannot afford to ignore the crucial sources of individual and societal flourishing. Three pillars—families, opportunities, and truths in social statistics—are the necessary ingredients for sound social policy.
James J. Heckman is a 2000 Nobel laureate, and the Henry Schultz distinguished service professor in economics and the college at the University of Chicago.
Gonzalo Schwarz serves as president and CEO of the Archbridge Institute in Washington, D.C.
The views expressed in this article are the writers' own.
Uncommon Knowledge
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