Working Paper: CEPR ID: DP18249
Authors: Diego Battiston; Stephan Maurer; Andrei Potlogea; José V Rodríguez Mora
Abstract: We use linked historical US censuses to study the empirical relationship between inequality and intergenerational mobility. We first confirm that the "Great Gatsby Curve" already existed in the early 20th century. We then study a "dynamic" version of the curve that relates changes in equality to changes in intergenerational mobility. Interestingly, we find that this relationship varies over two-decade periods for income, but remains consistent for education. Finally, we propose novel unitless measures of intergenerational mobility and inequality to show that the “Great Gatsby Curve” result re-emerges over the long run, for the period 1920 to 2011.
Keywords: inequality; intergenerational mobility; Great Gatsby Curve
JEL Codes: N12; N52; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Great Gatsby Curve (D31) | intergenerational mobility (J62) |
| income inequality (D31) | intergenerational mobility (J62) |
| changes in income inequality (D31) | changes in intergenerational mobility (J62) |
| educational attainment (I21) | intergenerational mobility (J62) |
| income inequality (D31) | educational attainment (I21) |