Anyone that has a student return home from college is now on the front line of the weak economy. Thanks to the Occupy Movement there has been needed discussion about income inequality and the subsequent concentration of wealth into the upper 0.1%.There is no doubt concentration of wealth has occurred since 1980 and is to blame for why your indebted college student is sleeping on your couch.
The possibility for the next generation to live better and earn more is vital to keeping the American Dream alive. The question is do countries with higher income inequality have less upward social mobility?
The graph shows income inequality (horizontal axis) measured as the Gini coefficient, where the higher number means more inequality. The inter-generational earnings elasticity (vertical axis) measures kid’s earnings when they are adults to that of their parents. A higher number the closer to the tree an apple falls.
There is a strong positive relationship between the income of the parents and the upward mobility of their kids. Low income, low mobility with the US the worst of the countries listed and Denmark as the best for income equality and upward mobility.
As concentration of income continues fewer kids are upwardly mobile which reduces macro-economic growth and jobs. If more people had rising incomes and a bigger share of the upper 0.1% income more kids would be upwardly mobile. There would be more growth and jobs thus reducing the cost of those midnight raids on your refrigerator.
The possibility for the next generation to live better and earn more is vital to keeping the American Dream alive. The question is do countries with higher income inequality have less upward social mobility?
The graph shows income inequality (horizontal axis) measured as the Gini coefficient, where the higher number means more inequality. The inter-generational earnings elasticity (vertical axis) measures kid’s earnings when they are adults to that of their parents. A higher number the closer to the tree an apple falls.
There is a strong positive relationship between the income of the parents and the upward mobility of their kids. Low income, low mobility with the US the worst of the countries listed and Denmark as the best for income equality and upward mobility.
As concentration of income continues fewer kids are upwardly mobile which reduces macro-economic growth and jobs. If more people had rising incomes and a bigger share of the upper 0.1% income more kids would be upwardly mobile. There would be more growth and jobs thus reducing the cost of those midnight raids on your refrigerator.
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