scholarly journals In Praise of Snapshots

2021 ◽  
pp. 97-112
Author(s):  
Ravi Kanbur
Keyword(s):  
Public Education ◽  
Education Policy ◽  
Income Distribution ◽  
Intergenerational Mobility ◽  
Income Redistribution ◽  
Income Mobility ◽  
Mobility Analysis ◽  
Great Gatsby ◽  
Normative Evaluation ◽  
The Great Gatsby

The conventional justification for moving from income distribution to intergenerational mobility analysis is that the movie encompasses the snapshot and is normatively superior as the basis for assessing policy. Such a perspective underpins many an argument for shifting the focus from income redistribution, which is said to equalize outcomes, to equalizing opportunity by increasing mobility through education policy such as equal provision of public education. This chapter argues that this perspective can be misleading. It shows that normative evaluation of income mobility in any event often falls back on a snapshot perspective. Further, the snapshot itself often contains the seeds of the movie, as posited in the Great Gatsby Curve. Income redistribution can itself improve mobility even if that is the only objective. The chapter thus speaks in praise of snapshots.

Jumping off of the Great Gatsby curve: how institutions facilitate entrepreneurship and intergenerational mobility

2014 ◽  
Vol 10 (2) ◽  
pp. 231-255 ◽  
Author(s):  
CHRISTOPHER J. BOUDREAUX
Keyword(s):  
Income Inequality ◽  
Property Rights ◽  
Institutional Quality ◽  
Income Mobility ◽  
Secondary Importance ◽  
Great Gatsby ◽  
Institutional Determinants ◽  
The Great Gatsby ◽  
Country Analysis ◽  
Cross Country

Abstract:Income inequality is often attributed to declines in income mobility following the Great Gatsby curve, but this relationship is of secondary importance in determining the factors of income mobility if one considers that changing rules is more important than changing outcomes under defined rules. Rather, improvements in institutional quality are hypothesized to increase income mobility by allowing entrepreneurs the freedom to pursue their dreams. This paper is the first to empirically analyze the institutional determinants behind entrepreneurship, and their effect on income mobility. The findings from a cross-country analysis suggest that secure property rights and less corruption are associated with less income persistence, leading to higher income mobility, independent of the Great Gatsby effect. This suggests that reducing corruption and protection of property rights increase income mobility through the channels of entrepreneurship.

Is the American dream dead? Inequality, mobility and entrepreneurship

2015 ◽  
Vol 4 (2) ◽  
pp. 234-256
Author(s):  
Young Back Choi
Keyword(s):  
Intergenerational Mobility ◽  
Negative Relationship ◽  
Critical Examination ◽  
Content Type ◽  
Statistical Inferences ◽  
Great Gatsby ◽  
Alternative Approach ◽  
The Great Gatsby ◽  
The Rich

Purpose – The purpose of this paper is to question the frequently heard claims of a negative relationship between inequality and intergenerational mobility (such as the “Great Gatsby Curve” by Alan Krueger) and to propose entrepreneurship as the neglected prime countervailing force against the putative advantages of the rich. Design/methodology/approach – A critical examination of evidences marshalled to support the case for a negative relationship between inequality and mobility, in terms of the appropriateness of statistical inferences and the consistency between implications and observations. The paper adopts alternative approach of Austrian economic in emphasizing the role of entrepreneurship in generating mobility. Findings – The putative negative relationship between inequality and mobility is not supported by evidence. The result is partly that egalitarians tend to skip close examination when they run into evidence that seems to support their preconception. It is also partly that the dominant tradition in economics, based on the model of efficient allocation of given resources, induces them to overlook entrepreneurship, the prime wealth creator and generator of mobility. Research limitations/implications – The research outlines an argument that the rich do not have advantage in entrepreneurship because it depends not on the ownership of currently valued resources, but on the discovery and exploitation of profitable opportunities. This claim is made based on Kirznerian perspective and author’s own theory of inference and learning process. However, it would be nice to able to provide empirical evidence of this claim made in the paper. Social implications – Many policies of redistribution, based on the belief that increase in inequality (as measured by Gini coefficient) signifies a diminution of intergenerational mobility, should be re-examined since the alleged negative relationship between inequality and intergenerational mobility turns out to be untrue. For greater intergenerational mobility, entrepreneurs should be encouraged, by allowing them to experiment freely. Originality/value – Emphasizing the role of entrepreneurship in intergenerational mobility and the dealing with the question of whether or not the rich would have advantage in entrepreneurship is original to this paper.

scholarly journals Income Inequality, Equality of Opportunity, and Intergenerational Mobility

2013 ◽  
Vol 27 (3) ◽  
pp. 79-102 ◽  
Author(s):  
Miles Corak
Keyword(s):  
Intergenerational Mobility ◽  
Family Background ◽  
Coming Of Age ◽  
The United States ◽  
Next Generation ◽  
Earnings Mobility ◽  
Great Gatsby ◽  
The Great Gatsby ◽  
Adult Earnings ◽  
The Relationship

My focus is on the degree to which increasing inequality in the high-income countries, particularly in the United States, is likely to limit economic mobility for the next generation of young adults. I discuss the underlying drivers of opportunity that generate the relationship between inequality and intergenerational mobility. The goal is to explain why America differs from other countries, how intergenerational mobility will change in an era of higher inequality, and how the process is different for the top 1 percent. I begin by presenting evidence that countries with more inequality at one point in time also experience less earnings mobility across the generations, a relationship that has been called “The Great Gatsby Curve.” The interaction between families, labor markets, and public policies all structure a child's opportunities and determine the extent to which adult earnings are related to family background—but they do so in different ways across national contexts. Both cross-country comparisons and the underlying trends suggest that these drivers are all configured most likely to lower, or at least not raise, the degree of intergenerational earnings mobility for the next generation of Americans coming of age in a more polarized labor market. This trend will likely continue unless there are changes in public policy that promote the human capital of children in a way that offers relatively greater benefits to the relatively disadvantaged.

Still Great: Subjective Intergenerational Mobility and Income Inequality

2018 ◽  
Vol 17 (5) ◽  
pp. 496-518 ◽  
Author(s):  
Eyal Bar-Haim
Keyword(s):  
Income Inequality ◽  
Intergenerational Mobility ◽  
Structural Constraints ◽  
Downward Mobility ◽  
Great Gatsby ◽  
Individual Perceptions ◽  
Intergenerational Income Mobility ◽  
The Social ◽  
The Great Gatsby ◽  
Using Data

AbstractIn recent years, the authors of several studies have established that income inequality is negatively associated with intergenerational income mobility in a phenomenon known as “The Great Gatsby Curve.” Yet, extant research on the effects of inequality and social mobility on people’s perceptions and social and political behavior has yielded contradicting results. In light of these inconsistencies, the aim of the current study was to evaluate the association between income inequality and subjective intergenerational mobility. Using data from 40 countries, the effect of income inequality on subjective mobility was examined, along with their combined effect on views regarding redistribution. The results indicated that income inequality increases mainly subjective downward mobility. The effect of subjective mobility on the attitudes toward redistribution was found to be substantial, but there were no significant results highlighting an interaction between inequality and subjective mobility. The results show how individual perceptions of opportunity inequalities are affected by the structural constraints of society. The social implications of these results are discussed herein.

The Canadian Geography of Intergenerational Income Mobility

2019 ◽  
Vol 130 (631) ◽  
pp. 2134-2174 ◽  
Author(s):  
Miles Corak
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Administrative Data ◽  
Intergenerational Mobility ◽  
Income Mobility ◽  
Men And Women ◽  
Census Division ◽  
Intergenerational Income Mobility ◽  
Different Dimensions

Abstract Intergenerational income mobility varies significantly across Canada, with the 266 Census Divisions in the 1986 Census clustering into five non-contiguous regions. Nine complementary indicators are calculated for each Census Division using administrative data on a cohort of men and women born between 1963 and 1970. Collectively these indicators underscore the importance of simultaneously examining different dimensions of intergenerational mobility and also show that higher mobility is most strongly associated with less income inequality in the bottom half of the income distribution.

Fitzgerald's the Great Gatsby and Glyn's Three Weeks

1996 ◽  
Vol 54 (4) ◽  
pp. 233-236 ◽  
Author(s):  
Nigel Brooks
Keyword(s):  
Great Gatsby ◽  
The Great Gatsby
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