Problem 4. Opportunity Insights is a research initiative based at Harvard University and led by Raj Chetty,
Question:
Problem 4.
Opportunity Insights is a research initiative based at Harvard University and led by Raj Chetty, John Friedman, and Nathaniel Hendren, with the goal of improving upward mobility in the United
States by studying barriers to economic opportunity and translating findings into pol icy change.3 As part of a 2017 study to understand the effect of the higher education system on upward mobility, Chetty et al. constructed an anonymized dataset covering all college students in the United States from 1999 - 2013 (30 million students) that includes parental income distribu tions and student earnings outcomes by college. Monetary values are measured in 2015 dollars; i.e. adjusted for inflation to 2015 dollars.
Parental income distributions were based on average pre-tax household income during the five year period when a child is aged 15-19 years. Parents were ranked relative to other parents with children in the same birth cohort. Children's individual earnings were measured in their mid-30s and compared to others in the same birth cohort.
Chetty et al. were particularly interested in characterizing colleges' mobility ratesat which col leges do the largest number of children come from poor families and end up in the upper middle class? They defined a college's mobility rate as the percentage of students with parents in the bottom income quintile who ended up in the top x% (in their mid-30s). The variables mr_kq5_pq1 and mr_ktop1_pq1 refer to the percentage of students with parents in the bottom income quintile who ended up in the top 20% and top 1%, respectively.
In this problem, you will examine a subset of data from the study; the data are in the file colleges.Rdata. The following table provides a list of the variables in the dataset and their descriptions.
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