This article was based on a new study by economists at Harvard University and the University of California, Berkeley on social mobility in America. According to their findings, America may not be socially less mobile than it was 40 years ago, despite its dramatic increase in income inequality. The researchers reported that the correlation between parents' and children's income and the odds that a child born into the bottom fifth of the income distribution will climb all the way up to the top fifth have not changed much over the years. "In 1971, a child from the poorest fifth had an 8.4% chance of making it to the top quintile. For a child born in 1986, the odds were 9%." Their results have caused a huge stir, not only because their findings run counter to public perceptions, but also because cross-country analyses have suggested that there is an inverse relationship between income inequality and social mobility (a phenomenon that has become known as the "Great Gatsby" curve").
The article went on to provide some explanations for this case. One, social stratification might take time to become entrenched. Second, even as income gaps have widened over the past 30 years, other barriers to mobility, such as discrimination against women and blacks, have fallen. Third, the correlation between vast wealth accruing to the top 1% of the population and the ability of people to move between the rest the income ladder may be small.
http://www.economist.com/news/united-states/21595437-america-no-less-socially-mobile-it-was-generation-ago-mobility-measured
6 comments:
The inverse relationship between income inequality and social mobility caught me off guard for a moment, but I suppose it makes sense. Could it be the inequality of incomes is an incentive for people to do better at work and seek promotions, thus changing their social ranking? I am curious as to any correlation between incentives within companies to "climb the ladder", in relation to the company-specific income distribution.
The inverse relationship between income inequality and social mobility means that as inequality increases, there is less social mobility. For example, children from low-income families are less likely to attend expensive private institutions or partake in costly extra-curricular activities while those from higher-income families can afford such privileges. Whereas less skilled parents struggle to make a living day-to-day, well-to-do parents can devote more of their time and energy in nurturing their children. In contrast to children from low-income families, children from higher-income families, with their access to privileged resources, are put on the path to success from an early age. To quote a frequently used metaphor, "It's harder to climb a ladder when the rungs are farther apart."
This finding is better than expected as the income inequality has been wider. I think the author have explained the reasons for this very well in the article. However, while nearly everyone agrees that declining social mobility is a bad thing, many people did not want Obama to focus on this matter too much in his last State of the Union address. If people do not make inequality an emphasis, it is hard to expect the country be more socially mobile
I am surprised that economic mobility has not changed in the last 40 years. There are more welfare opportunities out there for people to now get help, but that might reduce hunger or illiteracy. I wonder if they did a study on that what the outcomes would be, and how economic mobility affects it.
I think it should be easier for people to be able to climb to the top of the ranks. What is so different about Denmark then the U.S.? Why is it easier for them to make it big? Does it have to do with welfare opportunities, education opportunities, and children not getting inheritance money? What really affects a person to succeed to the top?
There are many factors in place that inhibit people from succeeding, I wonder if that is what affects the U.S and not Denmark.
If discrimination of women and blacks have really fallen then why is the gap still at large? And why are people still unable to get paid the same as white males?
Our country segregates neighborhoods and school districts but is that the only reason why the poor stay in the low class and the rich rise? Does it come down to opportunity?
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