In one of the latest episodes of the “Hidden Brain” podcast titled “Zipcode Destiny”, host Shankar Vedantam and Harvard economist Raj Chatty revisit the American Dream and discuss interplay between early education and childhood environment in setting one’s chances for socioeconomic success later in life.

In one of his latest studies, Professor Chatty reanalyzed data from existing randomized studies conducted decades ago evaluating the impact of a good kindergarten teacher on a child’s cognitive outcomes. The original conclusions were unimpressive: while there was some benefit in terms of improved standardized test scores in the first few grades, any gains faded out soon after.

Professor Chatty realized, though, that these studies weren’t looking far enough into the future. Merging in Social Security and income tax records, he and his colleagues showed that gains from being assigned to a better kindergarten classroom reemerge in adulthood. Children exposed to better teachers are significantly more likely to obtain a college degree and, on average, have higher earnings.

A great teacher, however, does not only train students in technical subjects but, more importantly, helps them develop “soft” skills like self-discipline, confidence, focus, and teamwork. Data shows that such non-cognitive skills are much more predictive of success in adulthood. Put simply, it is more important to get along with peers than scoring high on a math test!

In the second part of the podcast these finding are viewed through the lens of the ever-evolving American Dream. Opportunities for upward mobility do not just vary by state and city – children growing up only a few blocks apart can have very different outcomes in life. Findings show that community-level factors such as segregation levels, size of middle class, percent of two-family parents, are predictive of kids’ outcomes. Also, places with higher levels of social capital (e.g., a sense of community) are more favorable for economic mobility.

Many of these findings are outlined on the Opportunity Insights website, a resource put together by a team of Harvard researchers studying factors related to economic opportunities. The site offers a plethora of useful information, including academic papers and reports on the topic, interactive maps of mobility outcomes at a neighborhood level, as well as a free online course on Using Big Data to Solve Economic and Social Problems.

Circling back to the original question about the impact of early education, Professor Chatty shared results from another experiment that explored the effects of providing housing vouchers to residents of underprivileged communities for relocation to neighborhoods with better outlooks. Again, the new long-term reanalysis showed that the highest positive effect of such relocation was observed among kids whose families moved when they were very young. The length of exposure to a more opportune environment mattered a lot.

These insights can be used to inform policies aimed at decreasing inequality and reviving the American Dream. Professor Chatty suggests improving the reward system for teachers in public schools. The current structure places the most emphasis on experience, taking little consideration of teachers’ efforts and productivity. Also, a team of researchers is mapping data to identify “opportunity bargain” neighborhoods that are affordable to low-income families and have good long-term outcomes for children. They then work with local governments to develop programs that motivate low-income families to move by simplifying the moving process.

Professor Chatty’s outstanding research has informed policies that improve people’s lives. It would not be possible, however, without access to the ultimate “big data” such as anonymized tax, census, and Social Security records that allowed researchers to follow people across generations. Merging these data to existing well-designed studies that lacked long-term follow-up may provide deeper insights into issues of equality of opportunity.