'I was amazed and disturbed by the poverty around the Taj'

In the second of a four-part series (click here for Part I, Part III and Part IV),, Arthur J Pais profiles economist Raj Chetty, winner of the MacArthur Foundation Fellowship, nicknamed the 'genius grant'. In this interview, he emphasises how the presence of high value-added teachers in school can go a long way in shaping their pupils' destiny.

Raj Chetty was just a boy when he visited the Taj Mahal. He couldn't have known that seeing the beautiful monument against the backdrop of the poverty surrounding it would shape his life in some ways.

The contrast, he says, was key to shaping his interest in finding ways to change the world.

The newly-minted MacArthur Genius, who is a public economist and a professor of economics at Harvard University, made time for this interview, via phone and e-mail, in between a number of other interviews, receiving congratulatory messages, and meeting with students at Harvard University.

What were your school days like?

I came to America with my parents and two older sisters when I was about nine and went to a school in Bethesda, Maryland. It was a little challenging adjusting to a new environment.

I had studied at St Columbus in New Delhi, where the habit of answering a teacher's question by standing up had been ingrained in me.

When I would get up to answer a question in the class in Maryland, my class laughed at me. But I got over it and was encouraged by the fact that I was able to do well academically.

To my surprise, the school in Bethesda was actually much easier and less rigorous than the Catholic school I had attended in New Delhi, which made the transition much easier.

Moving to the US was one of the many experiences over the years that taught to me to adapt to different environments quickly. Another such experience was when my family lived in Belgium for a year when I was 2 years old.

I think those experiences have had an impact on my research, by making me think more abstractly and understand that there are many different ways to look at society and social problems.

I enjoyed and was lucky to excel in academics, but I also enjoyed playing cricket (when I was in India). Later, in Milwaukee (where my family had moved from Maryland) and Harvard, I enjoyed video games and intramural basketball. I was a reasonably good shooter, but not a physical player.

My friends would always make fun of me for trying to 'protect the brain.'

One of the earliest principles I learned in my life is that passion makes a huge difference. It is very easy to spend time on things that you are passionate about. I bring that passion to my research and teaching every day.

What were your career goals when you were in high school?

I am the youngest of three children, and have two sisters who are older to me by 10 and 14 years. My sisters and my mother are medical researchers and at one time I thought I would be a medical researcher too.

But I also found out soon enough that I was interested in abstract math and studying how the society around me could be improved and changed.

This passion came partly by observing my father, a well-known economist and statistician. Both my father and mother encouraged me to think ambitiously about doing something that would have substantial impacts on the world.

One of the most powerful impacts on my life was a visit to the Taj Mahal when I was a boy. I was amazed by its beauty. At the same time I was also amazed and disturbed by the poverty around the Taj.

The contrast has played an important role in shaping my interest in studying social inequities and finding ways to change the world, especially the lives of needy children.

From your early years in college you have been interested in issues affecting the common man, isn't it?

My PhD dissertation at Harvard, entitled Consumption Commitments and Risk Preferences, studied the optimal level of unemployment benefits. It asked questions such as, 'When someone is laid off, should the government provide them with substantial unemployment benefits?'

Traditional theory says no, since big benefits seemingly reduce the incentive to find a job. Standard models predict that we should have a small safety net.

But my research suggested that traditional economic models missed certain features of the world that really change the problem.

Most people have much of their income tied up in commitments, such as payments for houses and cars, which make it very difficult for them to adjust to income fluctuations such as unemployment shocks.

This 'commitment effect' greatly increases the value of having a large social safety net, and ultimately implies that a fairly generous unemployment insurance system is actually quite valuable for social welfare.

What fascinates you most as a researcher in economics?

I am fascinated by the power that economics has to transform millions of people's lives, contrasted with our relatively poor knowledge of how the economy works.

I think it is immensely important that we collect data and obtain data-based answers to critical policy questions -- such as the best way to design health insurance policies or tax policy -- irrespective of any political considerations.

We want to inform the public discourse using rigorous scientific methods, so that key policy choices are not just based on instinct or political opinion but rather on hard evidence.

Together with my research group at Berkeley and Harvard, we have applied scientific methods to analyse a variety of policy questions, ranging from the best way to design corporate tax policies to evaluating elementary school teachers to designing unemployment insurance systems.

Being able to tackle these important issues and see our work have an impact on the policy debate at a national level is very rewarding and motivating.

How do you feel when politicians cherry pick from your reports? For instance, when one line from your report was widely quoted in Congressional discussion ('It is well known that unemployment benefits raise unemployment durations...')

I recognise that politics will always play a role in any important decision. My goal is to provide evidence on the key facts, and what happens from there is largely outside my hands.

My hope is that in the end, solid evidence will carry the day, but in the short run, I accept that other factors may intervene.

Tell us about your recent studies on teacher quality and the accomplishment of the students.

We've done two recent studies on this topic. First, using data from Tennessee, we were able to calculate with precision the value of being randomly assigned to a good kindergarten classroom.

We tracked down data on earnings and other outcomes of some 12,000 children and studied how they had performed over the years.

We found that being assigned to a higher quality kindergarten classroom -- i.e., one with fewer students, better teachers, and better peers -- had long-lasting impacts on students well into their adulthood.

In the second study, we tried to understand why the quality of early childhood education matters so much, focusing in particular on whether teachers were the key factor.

In this study, my colleagues and I looked at data from grades three to eight for 2.5 million children in one of the country's largest school districts over a 20-year period. We then used other administrative records to track students after high school.

One of our conclusions was that if an elementary school student has an excellent teacher even for a single year, it boosts their income by an average of about 2 percent per year.

This second study involved measuring the 'value added' of teachers -- the impacts of teachers on students' scores on standardised tests. We identified experiments in the data when students come into contact with high value-added teachers.

We found that when a HVA teacher enters a school, test scores in the grade he or she teaches rise immediately, and when such a teacher leaves, test scores fall immediately.

More importantly, children who were lucky enough to be taught by a HVA teacher earn more as adults, are less likely to have teenage pregnancies, are more likely to attend college, and live in better neighbourhoods.

We found that an excellent elementary school teacher's contribution to society -- measured purely in terms of the earnings of her students and ignoring any other potential benefits -- exceeds $250,000 a year.

How can this information be used in practical terms?

The policymakers may consider hiring more HVA teachers or give them strong training and improve their value-added.

These results are directly informing the policy debate on teacher evaluation in the US and other countries today.

The findings are of importance to education anywhere, including in India. Having a better teacher -- who raises children's grades and non-cognitive skills (such as self-confidence) -- has roughly the same percentage impact on a student's future earnings regardless of the quality of the student or income of her parents.

Better teaching matters, and policies that improve teacher quality are likely to have vast benefits in any society.

Tell us a few things about the big project you are working on, which tracks economic mobility from one generation to the next by ZIP code, pinpointing conditions that help to promote a level playing field.

The goal of our current study is to understand how we can improve 'equality of opportunity' -- that is, giving children from low-income families a better chance of succeeding and moving up the economic ladder.

To do so, we plan to measure the degree of upward income mobility -- that is, the probability that a child earns significantly more than his parents -- by ZIP code in the US.

We will use these measures to determine which ZIP codes in the US offer the greatest prospects of upward mobility and understand the characteristics of these ZIP codes.

We then hope to identify which policies make some ZIP codes offer much greater opportunities for low-income individuals than others.

Is it the quality of local schools? Access to nearby colleges? Access to good jobs? Availability of resources to low-income families? We will develop experimental methods to test between these various hypotheses, and are excited to discover and report the answers.

A question I have asked most people I interview is about their biggest fear. The travel writer and novelist Paul Theroux told me he was never afraid of not having ideas for his novels but he was afraid he might write a boring novel. What are your fears?

I am afraid of following a big project over the years and see that it has not much of an impact. I want to use my limited time to maximise my impact by doing work that actually matters.

From time to time I get self doubts, but then I look at how far I have come in my research and draw confidence from the people who believe in my work, and renew my pursuit.

Photograph: Courtesy Raj Chetty