12: 46 p.m. | Updated to correct the description of the Great Gatsby curve.
Earlier this year, Alan Krueger, President of President Obama’s Council of economic advisors and a former Economix assistants, presented what he called the Great Gatsby curve: that is, a chart showing the negative link between generations mobility and income inequality in rich countries. It is assumed that the greater concentration of wealth may hinder the people at the bottom to move up the ladder of income.
Dollars to doughnuts.Since then, economic mobility project of the pastor has launched the American mobility State-level data. I thought it may be interesting to look at whether the States in which wealth is evenly also seem to provide more opportunities for upward mobility poor inhabitants.
It is extremely difficult question to answer (and the pastor report does not seek to do so), especially given the limited data available. But here is a rude, backing envelope first go.
Economic mobility project, the center of the pastor of the State; Count BureauRelative up mobility data are by Pastor economic mobility project. Researchers tracked a group of nationally representative Americans, who have been at the age of 35 and 39 at any point from 1978 to 1997 They examined how each individual incomes have changed just one decade after the number of the original revenue is collected. This measure, shown on the vertical axis here refers to the proportion of those who are in the bottom half of the distribution, which moved at least 10 percentiles.The chart above shows the injustice of the horizontal axis, and the corresponding revenues on the vertical axis. Here you can find exact measures I used:
Pastor produced several different measures for economic mobility (none of which is directly comparable to that used in the original Gatsby curve chart, unfortunately). I focus on its metric for relative upward mobility.
This is calculated as the focus on Americans, which when checked in sometime between 1978 and 1997, were in the bottom half of the distribution of income — that is, they have less than the median American. The authors of the report consider what some of these people were able to move at least 10 percentiles up the income ladder, when interviewed again exactly a decade later.
Larger number, for each Member State means that a large part of the people at the bottom have managed to pull my own bootstraps. For example, Connecticut, about half of the people who begin at the bottom of the distribution of revenue climbed to at least 10 percentiles.
Then I looked for income distribution, called the Gini index, which runs from zero to one. With lower Gini coefficient of mean income is more evenly, and higher value means revenue is more concentrated among the wealthiest.
Bureau of census offers bit values for the Gini index of State for election years. I took an average of values for 1979 and 1989 (two years falling within the period of the study dealt with pastor) and compare those values, mobility.
Again this is very serious, but it seems that is a weak negative relation in the best. (For the nerds there, R-squared is just a 0.048.)
Also I tried plotting inequalities against absolute income mobility — that is, the average percentage growth of residents income more than a decade. For example, the average New Yorker is 20 per cent increase in income.
Sources: Economic mobility project, the center of the pastor of the State; Count BureauAbsolute up mobility data are by Pastor economic mobility project. Researchers tracked a group of nationally representative Americans, who have been at the age of 35 and 39 at any point from 1978 to 1997 They examined how each individual incomes have changed just one decade after the number of the original revenue is collected. This measure, shown on the vertical axis here refers to how much these income rises.The link here is slightly stronger, but still rather weak. (R-squared is 0.09 in this case.)
One challenge you might notice these data – except that the years just not covered, among other things, is that there is only that much variation in inequality among States. Gini coefficients range from 0.3795 to 0.471, so that the points are clustered relatively close cooperation.
Do you have any thoughts on other ways to examine how inequality affect mobility in the United States?
This post has been revised to reflect the following correction:
Correction of 18 may 2012.
At one point, an earlier version of this post misstated the relationship shown in the curve of the Great Gatsby intergenerational mobility and income inequality in rich countries. Is negative, not positive; Therefore, as the post correctly indicated greater concentration of wealth may hinder the people at the bottom to move up the ladder of income.
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