Here is the source for the “Great Gatsby Curve” in the Alan Krueger speech at the Center for American Progress on January 12

This is an important issue and thank you for presenting it. Since most literature assumes that elasticity is the same regardless of the position of the father in the income distribution, the resulting calculation should be considered as an overall average measure of relative mobility.

Estimating the elasticity of each percentile of the father's distribution is difficult due to the large amount of observations that must be made against the income of the father and son. As researchers use administrative data related to government programs, this is possible in some countries.

Co-authors and Canadians using Canadian data found that the elasticities differ depending on their father's rank. The lowest lowest, rising in the lower half of the income distribution, rising in the first half, then rising sharply thereafter. Please see our paper on Human Resources Journal.

Nathan Grawe also explained this problem and the correct explanation in a series of papers. One of them is also published in the Human Resources Journal.

Evidence in the US is somewhat vague due to data size limitation related to sample size, but in the United States and the UK, unlike the Nordic countries survey results, this model is suggested by a good comparative study that is linear I will. I will learn. The summary of the paper published in "Economic Daily" is as follows.

The intergenerational surplus flow pattern of Denmark, Finland and Norway shows that it is very nonlinear, unlike that of the United States and Britain. At the bottom of the father's income distribution, the Nordic relationship of logarithmic income of his son and his father is flat - the son growing in the poorest household has the same adult income prospect as the son of the middle-income household - the upper section This inflated pattern Is in sharp contrast to our findings in the United States and the UK where the relationship between the United States and Britain is more linear. Therefore cross-country comparison of income elasticity among generations may mislead the transmission mechanism of the income distribution center and there is no information at the end of the distribution.

Occasionally, academic research enters the political ancestry. A typical example of this is the "Great Gatsby curve", which represents the inverse relationship between income disparity and generational mobility. The curve was born in 2011 and attracted both cheers and humiliation. In the coming weeks, social mobility notes are commented on both sides of the discussion, along with a famous person Alan Krueger starting today. Based on works of Miles Corak, Anders Björklund, Markus Jantti, etc., I presented "Great Gatsby Curve" at a speech in January 2012. The way of thinking is simple: Generation income disparity exacerbates wealth and wealth results. Economic status of poor parents for the next generation

Consistent with the Great Gatsby curve, some studies also pointed out the expanding gap of educational resources among high-income and low-income American homes. As predicted by the "Great Gatsby Curve", the sharp increase in income gap seems to create a more competitive environment for the next generation.

The general political response to the increase of inequality is to assert that it is an economic opportunity that is truly important. Do people have the opportunity to go up to the top? Alan Kluger, then chairman of the Economic Advisory Council of the White House, challenged this point by calling it the "Great Gatsby Curve" in 2012. It shows a strong correlation between national income inequality and intergenerational mobility. Sweden has not taken a feudal economy or political regime for quite some time, but even early in the 21st century people with surname of the nobility far exceed their income. An ordinary farmer 's family name Anderson. According to this view, inequality may not prevent upward mobility, but upward mobility is very poor, so it is almost impossible for it to solve concerns about inequality.