Inequality

Friendships between rich and poor are key to reducing inequality, study finds

Friends sit in a park as friendships can help alleviate inequality.

Friends sit in a park as friendships can help alleviate inequality. Image: Ben Duchac on Unsplash

Spencer Feingold
Digital Editor, World Economic Forum
Share:
The Big Picture
Explore and monitor how Inequality is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Inequality

Listen to the article

  • New research found that friendships that cut across class lines are a significant indicator of economic mobility.
  • The vast analysis covered 84% of Americans ages 25 to 44 and included an examination of 21 billion Facebook friendships.
  • “Desegregating the places where individuals interact is important but not enough,” a lead co-author of the study stated.

Friendships that cut across class lines are a key indicator of economic mobility and can help alleviate inequality, according to new research in the United States.

The study—published this week in Nature—found that poor children who grew up with wealthy friends had, on average, 20% higher incomes later in life than other poor kids. In fact, researchers found that friendships between rich and poor people are a more important metric of determining upward economic mobility than other forms of social capital like having wealthy parents or attending high quality schools.

“People obtain job opportunities, information and behavioral norms from their networks, and thus their outcomes are heavily dependent upon those of their friends and acquaintances,” explained Matthew Jackson, a professor of economics at Stanford University and one of the lead authors of the report.

The study involved an analysis of US census and tax data and the Facebook accounts of over 72 million users. The extensive analysis covered 84% of Americans ages 25 to 44 and included an examination of 21 billion Facebook friendships that spanned income brackets. Academics from several top US universities including Harvard, New York University and Stanford collaborated on the report.

The immense amount of data that we are releasing should help researchers better pinpoint what drives a lack of cross-class interactions as well as immobility

Matthew Jackson, professor of economics at Stanford

Cross-class friendships and inequality

Across the country, the study’s findings on the importance of cross-class friendships were consistent. “Areas with higher [economic connectedness] have large positive causal effects on children’s prospects for upward mobility,” the analysis concluded.

The report significantly contributes to the debate over the best ways to mitigate inequality—an issue that economists and social scientists have long grappled with. In the United States, where over 37 million people live in poverty, inequality has been rapidly increasing since the 1970s, with the top 10% of Americans holding nearly 70% of all wealth in the country in 2022.

Have you read?

Furthermore, researchers have long warned that income segregation in the United States is worsening, with an increasing number of people living in either very rich or very poor neighborhoods.

Francisco H. G. Ferreira, a professor of inequality studies at the London School of Economics and the director of the International Inequalities Institute, noted that the Nature study “reveals another component of the hardening poverty trap in the United States, whereby upward mobility is least available to those at the very bottom of society”.

“Social capital is associated with other forms of capital—say, human and financial,” Ferreira explained. “The poorest places in the United States tend to have less of all of these, including the opportunity for cross-class friendships.”

The scholars behind the study hope the new research will inform policy-making decisions, and reinforce the need for cultivating cross-class relationships at an early age. “Many policies in the past have focused on increasing exposure,” said Theresa Kuchler, an associate professor of finance at New York University and another lead author of the study. “Desegregating the places where individuals interact is important but not enough.”

Kuchler added that lawmakers “interested in fostering economic connectedness should be equally focused on increasing cross-class interactions within a range of settings.”

Meta, Facebook's parent company, also marked the publication of the study, noting in a statement from Nick Clegg, the company's president of global affairs, that the internal Facebook data was shared through the platform's Data for Good programme and that the study's finding constitutes a "major contribution to our understanding of the relationship between social connections and economic opportunity".

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

This is why the number of refugees could double in the next decade, according to the head of UNHCR

Liam Coleman

March 7, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum