To paraphrase Bill Murray in Groundhog Day…The USA is not the land of opportunity, it’s a land of opportunity. The OCED chart below tracks the relationship between parents and child earnings. The US is more mobile that England and Italy, but lags behind all the other countries in the chart.
This, of course, is one measure of income mobility (inter-generational income mobility). It doesn’t measure the ability of new immigrants to succeed in the US. Similarly, it doesn’t account for the higher heterogeneity in the US when compared to Scandinavia or even Canada/Australia. Nevertheless, it does raise questions about how whether the American “gospel of success” still resonates today?
What do you think accounts for the differences in intergenerational-income mobility between nations?
Comments 2
Kenneth M. Kambara — August 24, 2010
The Canadian experience is interesting (a 1996 study included just males), as while the overall pattern is of more mobility, the numbers show that at the extremes that wealth begets wealth and poverty begets poverty. There appears to be a tipping point where those with fathers with incomes higher than that point tend to have sons that fared better, while the reverse was true below that point. See:: The Intergenerational Income Mobility of Canadian Men
by Miles Corak and Andrew Heisz.
Something to think about from a paper I was reading that I can't find this second. What are the public expenditures on education per capita in these countries and what are the private returns to educational attainment?
Kunoichi — August 25, 2010
I'm not sure I understand how these comparisons work. How does "opportunity" equal "who's making more money right now." From how I understand it, opportunity represents one's ability to change one's current status to, hopefully, an improved situation. ie: someone who is poor having opportunities to rise out of poverty, someone who is employed has the opportunity to own their own business, etc.
This comparison of countries only works if the only guage used to define opportunity is a higher income. Rather than measuring how one generation's income compares to the previous generation, would it not make more sense to compare one generation's freedom to *change* their status from one they don't want to one they do want vs. the previous generation be a better measure?