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The Great Gatsby Curve

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  • Durlauf, Steven N.
  • Kourtellos, Andros
  • Tan, Chih Ming

Abstract

This paper provides a synthesis of theoretical and empirical work on the Great Gatsby Curve, the positive empirical relationship between cross-section income inequality and persistence of income across generations. We present statistical models of income dynamics that mechanically give rise to the relationship between inequality and mobility. Five distinct classes of theories, including models on family investments, skills, social influences, political economy, and aspirations are developed, each providing a behavioral mechanism to explain the relationship. Finally, we review empirical studies that provide evidence of the curve for a range of contexts and socioeconomic outcomes as well as explore evidence on mechanisms. (Stone Center on Socio-Economic Inequality Working Paper)

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  • Durlauf, Steven N. & Kourtellos, Andros & Tan, Chih Ming, 2021. "The Great Gatsby Curve," SocArXiv mrw9y, Center for Open Science.
    • Handle: RePEc:osf:socarx:mrw9y
    DOI: 10.31219/osf.io/mrw9y
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    Cited by:

    1. Giovanni Bernardo & Giuseppe Cinquegrana & Giovanni Fosco, 2023. "Teenage parenthood, circumstances and educational mobility of children," Discussion Papers 2023/289, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Bohmann, Sandra & Kalleitner, Fabian, 2023. "Subjective Inequity Aversion: Unfair Inequality, Subjective Well-Being, and Preferences for Redistribution," SocArXiv g8arw, Center for Open Science.
    3. Pestieau, Pierre & Racionero, Maria, 2023. "Education, mobility and redistribution," LIDAM Discussion Papers CORE 2023024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Martín Trombetta, 2023. "The distributional implications of short-term income mobility: evidence for Latin America," Working Papers 241, Red Nacional de Investigadores en Economía (RedNIE).
    5. Carneiro, Pedro & Reis, Hugo & Toppeta, Alessandro, 2024. "Parental Investments and Socio-Economic Gradients in Learning across European Countries," IZA Discussion Papers 16785, Institute of Labor Economics (IZA).
    6. Yoosoon Chang & Steven N. Durlauf & Seunghee Lee & Joon Y. Park, 2023. "A Trajectories-Based Approach to Measuring Intergenerational Mobility," NBER Working Papers 31020, National Bureau of Economic Research, Inc.
    7. Diego Battiston & Stephan Maurer & Andrei Potlogea & Jose V. Rodriguez Mora, 2023. "The Dynamics of the “Great Gatsby Curve”, and a look at the curve during the Great Gatsby Era," Working Paper Series of the Department of Economics, University of Konstanz 2023-02, Department of Economics, University of Konstanz.
    8. Gangl, Markus, 2024. "Economic inequality and the cross-cutting of social circles: Evidence for a Great Gatsby curve in European marriage and partnership markets," OSF Preprints pfv6w, Center for Open Science.
    9. Markussen, Simen & Røed, Knut, 2023. "The rising influence of family background on early school performance," Economics of Education Review, Elsevier, vol. 97(C).
    10. Carranza, Rafael & Nolan, Brian & Bavaro, Michele, 2023. "Intergenerational Poverty Persistence in Europe - Is There a 'Great Gatsby Curve' for Poverty?," INET Oxford Working Papers 2023-22, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford, revised Dec 2023.
    11. Perelman, Sergio & Pestieau, Pierre & Racionero, Maria, 2023. "Social mobility, education and populism," LIDAM Discussion Papers CORE 2023026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. Wei Zou & Ruiqi Ma, 2024. "An Extended Family Perspective on Intergenerational Human Capital Transmission in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(3), pages 1101-1139, September.

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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