Facebook study explores how friends impact economic mobility – TechCrunch

A large-scale study of Facebook data sheds new light on the ties between Americans — and how those relationships in turn shape economic outcomes.

A research team led by Harvard economist Raj Chetty published the results today across two papers in the journal Nature, exploring how social connections lead to economic opportunity. The researchers examined data from 21 billion friendships on Facebook, collected from 72.2 million U.S.-based Facebook users between age 25 and 44 who listed their zip code.

The first paper looks at those outcomes through the lens of “economic connectedness” — basically how close people from different economic classes are to one another. The researchers found that people with lower incomes were more likely to improve their financial situations over time if they were connected to people with higher incomes.

“The share of high-SES friends among individuals with low SES — which we term economic connectedness — is among the strongest predictors of upward income mobility identified to date,” the researcher writes. “If children with low-SES parents were to grow up in counties with economic connectedness comparable to that of the average child with high-SES parents, their incomes in adulthood would increase by 20% on average.”

Research on income mobility isn’t just for idle academic interest. As the researchers point out, more knowledge about the social ties that bind communities and how those lead to different economic outcomes can inform interventions designed to help elevate low-income communities and provide them with more financial opportunity.

The second paper dives into those connections themselves and how they are formed. The Harvard team found that connections between high- and low-income people were often forged through structured social organizations, like schools and religious groups. Still, the researchers found that even with social exposure to other income levels, people were still more likely to forge social bonds with other people who share their socioeconomic status.

The research is interesting and potentially consequential given the widening wealth gap in the U.S. Upper-income families continue to accumulate wealth at a quickening pace, leaving the have-nots even farther behind. And the top 5% of wealthiest U.S. families are growing their wealth the fastest of all.

“Differences in economic connectedness can explain well-known relationships between upward income mobility and racial segregation, poverty rates, and inequality,” the researchers write.

With the largest user base of any social platform ever created, Facebook offers a wealth of potential data for researchers interested in studying myriad aspects of human behavior and social structures. Historically, Facebook parent company Meta has a somewhat fraught relationship with researchers, particularly those interested in shining a light on how the social network itself shapes society, but there are signs that Meta is warming up to more outside research.

Meta also remains sensitive to potential abuses of the vast trove of personal data it monetizes. The company is still living down a reputation for lax data management in the aftermath of the Cambridge Analytica scandal, even four years later. Still, the company seems to be aware that empowering research for social good could help offset its long history of sowing social discord.

“This work is a major contribution to our understanding of the relationship between social connections and economic opportunity,” Meta wrote in a blog post on the research. “And it shows how Meta’s data can be used for societally significant research when shared responsibly and in a way that protects people’s privacy.”

The data is also available through a new interactive site called the “social capital atlas.”

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