Compass Staff |
In 1940, 92% of kids in America could grow up to do better than their parents, economically-speaking. Today, that’s just 50%. The American Dream, in other words, comes down to a coin toss. This issue, it turns out, really comes down to local inequalities.
“There’s a tremendous amount of variation in children’s chances of rising up,” said economist Raj Chetty, speaking at Guild Opportunity Summit 2025 in San Diego Monday. “It suggests that there are lots of people just left behind whose talents we’re not taking advantage of … or helping them achieve their potential.”
Chetty is the William A. Ackman Professor of Economics at Harvard University and the director of Opportunity Insights, a Harvard-based group of researchers and policy analysts working to address a fundamental challenge: How can we give children from all backgrounds better chances of succeeding?
In recent years, Chetty and his team’s groundbreaking research has shown just how much the ZIP code a child lives in can define his or her future. The longer a child lives in a neighborhood of opportunity — a racially integrated area with a large middle class, with stronger family structures, more social capital, and better schools — the more likely they are to improve their standard of living as adults.
“It’s not just about teaching people technical skills. It’s about helping people use those skills to really achieve a transformation in their role and a transformation in their career.”
- Raj Chetty
ZIP codes predict outcomes, but leaders can change them.
In his keynote presentation on the first day of Guild Opportunity Summit, Chetty shared a heat map of the U.S. showing the variations, divided by zip code, in levels of economic opportunity across the country. Children who grow up in low economic mobility zones have the lowest chances of bettering their parents’ economic prospects while those in high mobility neighborhoods are likely to level up.
The strongest characteristics of high economic mobility areas, according to Chetty, include lower poverty rate, more stable family structures, better K-12-level schools and easier access to higher education, and social capital — that is, who you know across class lines and the networks that help you find opportunities.
“Why is this kind of information on the effects of the program in different places helpful?” You can use this data to start to understand what kinds of interventions are most effective, to inform your own programs, to make them effective going forward,” Chetty said.
Local problems demand local solutions.
To Chetty, these inherently local mobility problems require local solutions. To grow the pool of American children with elevated economic mobility, Chetty said these solutions would be most effective in targeting three areas:
Reducing economic segregation
Making place-based investments
Increasing access to higher education and workforce training
“This third approach is particularly actionable in some ways,” Chetty said, adding that improving outcomes for students who attend community colleges or maybe don’t attend college at all can go a long way toward reviving the American Dream. Chetty cautioned, though, that to improve the probability of success, learning programs should be industry-, role-, and career-aligned — and supported through coaching.
“It’s not just about teaching people technical skills,” Chetty said. “It’s about helping people use those skills to really achieve a transformation in their role and a transformation in their career.”
In his presentation, Chetty pointed to programs that turn these ideas into measurable gains — YearUp and Vaughn College — as proof that local, career-aligned pathways can move the needle.
Case in point: Year Up
Skills + internships = durable-earnings lift
Year Up is a one-year program that teaches targeted skills (e.g., IT, financial ops) and places learners in internships with hiring employers. Essentially, learners build targeted skills and get an internship in a firm that’s looking to hire for exactly that skill set, Chetty explained.
A randomized trial — linked to tax data — showed learner participants’ earnings dip during training, then jump by about $9,000 per year and stay elevated for a decade or more. And the gains, Chetty said, are “totally persistent,” even amid AI-era change.
Though performance varies by market, the strongest predictor of impact is the share of learners placed in internships in the target sector — underscoring that coaching, connections, and on-ramps are as critical as the classroom.
Takeaway for leaders: Teach in-demand skills, place learners into relevant roles, and support them in using those skills on the job.
Case in point: Vaughn College
Career-specific training as a mobility engine
Vaughn College of Aeronautics and Technology, a small school in Queens, N.Y., trains students for aeronautics and tech roles that are accessible to lower-income learners and pay competitively.
Chetty highlighted Vaughn as an exception: On a modest scale, the school functions as a real engine of social mobility, moving students from lower-income backgrounds into strong first jobs and careers. The way they do this is by taking a “modern-day vocational” approach that aligns programs tightly to specific career skills and hiring demand — an approach leaders can emulate in corporate academies and talent pathways.
Takeaway for leaders: For institutions and employers seeking scale, career-linked training and clear pathways into resilient roles offer a practical route to expand upward mobility without the costs of elite, low-access models.
Closing thoughts
“I've shown you lots of different data here, but I think ultimately the messages are simple,” Chetty said. “I’d encourage you to measure the impacts of the efforts you already have in place. Focus on connecting people to opportunity, not just training them, and, finally, recognizing that the efforts you all are involved in are part of a much bigger story about reviving the American dream, and I’m delighted that you all are engaged in exactly that.”
