The Power of Connection: What Raj Chetty’s Research Means for Investor

by Jenny Kassan

I’ve spent most of my career fighting for a more just and inclusive economy—one where everyone, not just the wealthy, gets to participate and benefit. 

In these efforts, I am always asking myself – what actually works to move the needle on the staggering and rapidly increasing level of wealth inequality? 

Raj Chetty and his colleagues have given us empirical evidence that working to build meaningful community connections can be a key to wealth building – he has found that, more than any other factor, friendships across class lines are a powerful driver of upward mobility.

In their groundbreaking study published in Nature, Chetty and his team analyzed the social connections of 72 million Americans. What they found was both sobering and hopeful: kids from low-income families are more likely to rise out of poverty if they grow up in communities where they have friendships with people from higher-income families. In fact, this kind of “economic connectedness” was the strongest predictor of economic mobility they found.

Raj Chetty

This research suggests that if we want to build a more inclusive economy, we need to be just as intentional about building trusting relationships as we are about building investment funds and economic development projects. 

The “soft,” difficult-to-measure skill of community building among people of diverse backgrounds is key to moving financial capital into the hands of those who need it most.

Imagine a place where people of all levels of wealth and income can come together to learn about the economy, business, and community investing? A safe and welcoming space where relationships can grow across lines of class, race, and background. 

Many of us know intuitively that community building is important work – but how many of us recognize that this work does more than encourage civic engagement and tackle loneliness – it can actually grow healthy and equitable local economies.

As community investors, we know that real change doesn’t come from charity—it comes from solidarity. From the simple, radical act of recognizing the humanity and gifts of everyone in our community and sharing the risks and rewards of building something new.

At Baltimore Community Commons, we are building just such a place! Please reach out if you’d like to learn more.