The American dream is still alive and can be achieved in just one generation, even among the most economically disadvantaged young people. That finding is among the most promising takeaways from new research produced by Harvard University’s Raj Chetty and his collaborators. These analysts studied economic outcomes for 57 million children born between 1978 and 1992, whose income was then measured in adulthood at age 27, from 2005 to 2019, and found gains across racial lines.

“Earnings increased for Black children at all parental income levels, reducing white-Black earnings gaps for children from low-income families by 30%,” say the paper’s authors. It is encouraging that the Black-white gap in upward mobility shrank so significantly in just the past 15 years, even though overall racial gaps remain.

While a person’s race matters increasingly less, there are community level characteristics whose absence or presence more directly drive individual prospects of upward or downward mobility. Indeed, this study finds a neighborhood–level factor that principally drives access to the American dream.

Lead researcher Benjamin Goldman explained at a Brookings Institution presentation: “In economics, there is something called a one-factor model where … a single variable seems to fully explain why outcomes have changed differently for different race and class groups over the last 15 years.”

That single variable? The rate of working parents in a given community.

Communities that experienced increases in parental employment had the largest increases in household income for children when they reached age 27, regardless of the employment status of a parent in an individual child’s household.

This is a substantial finding, but not entirely new. Sociologist William Julius Wilson showed in two of his seminal books, “The Declining Significance of Race” and “When Work Disappears: The World of the New Urban Poor,” that unemployment levels within a given community far outweigh race as a determining factor for mobility. In his view, fewer adults in the labor force is a catalyst for many of the social ills that further deteriorate economic opportunity for children.

In 1996, Wilson wrote in “When Work Disappears,” “Many of today’s problems … crime, family dissolution, welfare, low levels of social organization, and so on … are fundamentally a consequence of the disappearance of work.” While Wilson emphasized the devastating impact of joblessness in a community, Chetty’s 2024 study highlights the positive corollary: the constructive effect that low unemployment rates in a particular community have for young people growing up there.

Robert Doar, president of the American Enterprise Institute, highlighted one of the study’s implications on crafting social welfare policy: “There is a real significance to (adult) employment in the community, for kids, for their future upward mobility. … That importance would make you skeptical of cash benefits that don’t have a work connection.”

In other words, policymakers should deemphasize cash transfer programs that provide public dollars directly to individuals, unconditionally. These “no-strings-attached” programs often have the behavioral effect of discouraging work. Instead, pursue programs that require labor force participation in order to receive benefits.

While the study reaffirms that high levels of parental employment in the community is a huge factor in determining future economic mobility for children, there are other forces at play, too. Positive changes in a community’s marriage rate are additionally correlated to greater earnings power for children who grew up in the community, regardless of the marital status of an individual child’s household.

This is also a substantial finding, and also not entirely new. Chetty’s 2024 insights on the correlation between neighborhood marriage rates and prospects for economic advancement echo those found in his 2014 study entitled “Where is the Land of Opportunity?”

The study described the United States as a “collection of societies, some of which are ‘lands of opportunity’ with high rates of mobility across generations, and others that experience persistent inequality, places in which few children escape poverty.” Among the findings was that “the strongest predictors of upward mobility are measures of family structure such as the fraction of single parents in the area.”

Knowing that high rates of work and marriage among adults likely drives upward mobility for children, what should we do? Mandating work requirements in order to receive government benefits is an effective lever that can be deployed today to incentivize greater adult employment, especially in communities where parents’ employment rates are low. But increasing marriage rates is far trickier and out of reach for most public policy, especially for adults who are already struggling.

But what of the rising generation? Young people today are turning away from marriage and subsequent family formation as a formal life course. According to a 2023 Pew Research Survey, among all adults ages 18 to 34, only 20% say being married is extremely or very important for people to live a fulfilling life, and only 22% say having children is extremely or very important. These attitudes have played out in practice: America and other nations continue to experience plummeting birth rates and marriage rates.

Moreover, a growing mass of able-bodied young men, and some young women, are simply opting out of the labor force, as my American Enterprise Institute colleague Nicholas Eberstadt has discovered.

Unless these trends are reversed, a generation from now, we will have recreated the same types of low-work, low-marriage-rate conditions in communities that “experience persistent inequality, places in which few children escape poverty.”

It does not have to be this way.

Young people between the ages of 14 and 24, during what I call the “Deciding Decade,” are making critical decisions about relationships, work, family formation, education, faith and more. The choices made during this timeframe, while not completely determinative, will have huge influence over a child’s life trajectory of happiness, economic outcomes and ultimate fulfillment — where one chooses to go to school and how hard they work, what job they seek, what friendships they pursue; who they fall in love with; what religious faith they choose to practice or not, and so forth.

The more these choices are made with conscious volition, the greater the likelihood young people will lead self-determined lives of meaning and purpose. Three policy areas could facilitate these outcomes.

First, we should be advocating for more educational freedom, which encompasses school choice like public charter schools and the types of vouchers, tuition tax credits and educational savings accounts that can be used by parents to access private or parochial schools and craft customized educational experiences for their children.

Second, students — particularly in high school — should be disabused of the notion that college is the only immediate option after high school. The model of secondary school education should be expanded to include work/study apprenticeship-type models that allow students in their junior and senior years to earn industry credentials in skilled trades like carpentry, welding or electrical, or pursue high-growth careers that don’t necessarily require a college degree, like entry-level opportunities in health care or computer science.

Finally, to shift attitudes and enhance the attractiveness of marriage, schools should integrate curricula that encourages students to develop healthy relationships and make key life decisions based on the data associated with research often referred to as the “Success Sequence” — that 97% of millennials who have completed their education, secured full-time work, gotten married and then had children (in that order) avoid poverty and positively enter the middle class or beyond.

To reiterate: reports of the death of the American dream have been greatly exaggerated. But keeping it alive requires policymakers and elected officials to be more hard-nosed about demanding work today in return for public benefits, while also using the bully pulpit to shift the rising generation’s attitudes toward marriage and family formation tomorrow.

Rebuilding opportunity is a national challenge, but change happens locally. It requires buy-in from institutions, including families, schools, houses of worship, civil society organizations and businesses, to support local solutions, particularly around strengthening work and marriage.

The good news, according to this study, is that breaking the intergenerational cycle of poverty is achievable within the span of just 15 years, less than one generation. Rather than being told systems are rigged for failure, young people — especially those that are struggling — should know that their lives can be their own.