Spencer alluded to a theory that the United States had high income inequality but also had high social mobility. The United States is the land of opportunity, right? Unfortunately, recent research (see here for discussion) shows that no country has that kind of trajectory. Instead high mobility countries have low inequality and vice versa. See the "Great Gatsby" curve below.So education is not the great leveler we thought it was. Inequality's effect persist.
To be fair in this chart countries that have very low Gini coefficients (and are thus much more equal) are also much more likely to have more equal access to higher education. For instance Finland, Denmark, Sweden, Germany, etc. are all much more equal than the US and also have free college education. So this chart actually also supports my argument if framed in a different way.
ReplyDeleteI would also like to point out that I was not strictly talking about social mobility in terms of being able to make more money than other people in your society. If there were two people in society and one made $1 and the other made $100, then the first person making $99 would not actually create any social mobility by this definition but it would decrease inequality. This is no doubt good for society but would not recognized by this metric.
This decrease in inequality would then also make social mobility easier! It is much likelier to get a raise of $2 when you make $99 than a raise of $98 when you only make $1. So in the sense that it is easier to pass more people it makes sense that less unequal countries have more social mobility. I have so many thoughts on this chart, but they are very difficult to write down in a blog post so hopefully we can bring this back up in the class discussion on Tuesday at some point.
Finally, I would like to conclude with a paper which debunks both of our arguments. This is a recent paper by one of my professors at LSE. He shows that all current measures of social mobility are fundamentally flawed, and that social mobility is much less than we previously believed. He also shows that it has been essentially constant since the 1100's in England and that by his new measure there are actually almost no differences between countries. Just some food for thought.
http://neilcummins.com/Papers/Clark_Cummins_Science_2013.pdf
When you are comparing two people in a society, are you assuming that whoever making $100 will not be doubling, or tripling his/her $100?
DeleteBecause that decrease in inequality will be possible, only if that person in higher socioeconomic status was staying at where he/she was, and waiting for the other to catch him up.
And I think the paper you attached is pretty similar to the way I believe. Like Clark and Cummins say, "the true underlying correlation of social status is in the range 0.75-0.85. Social status is more strongly inherited even than height."
When interpreting social mobility, we should consider how much rich people can get even richer, not just low-income people trying moving up the social/economic ladder. Because rich people are constantly multiplying wealth, probably at much faster rate than lower class do, social mobility just seems almost impossible.
I was just using an extremely simple example to make a point. When wages are more spread out, it is more difficult to pass other people. I was just pointing out a flaw in that chart, and the metric of social mobility in general, that could explain the relationship between inequality and social mobility.
DeleteWhat do you think about Clark and Cummins second point on social mobility? That it has been constant in England for practically a millenium? That no societal, cultural, or governmental changes that have happened have ever had an effect on social mobility.
Higher education does not guarantee more opportunities in jobs. That's how I'm feeling these days. Whenever I look for jobs, there are a very limited number of entry positions and most require at least 2-3 years of experiences with master's degree. Even if there is a position open for entry jobs, it is likely to be temporary or under 2-year contract. I think the gap between the rich and the poor is inevitable and it will continue to grow. Perhaps we can slow that down. I recently talked to one of the visiting professors who work at Upjohn Institute. She said that some internship positions are most likely to be taken by so and so's sons, daughters, relatives, and friends. This example tells us that people with economic power or any type of power will get more opportunities leading into deepened inequality.
ReplyDeleteI found an article about a book that says the US is still the land of opportunity. The authors of the book argues that Americans should adjust to fast-paced technological and economic changes. For example, Americans should pay more attention to middle-skilled workers. Because many people spend more time and money on higher education, the country is not devoting to vocational or technical schools. It is important to improve the teaching of technical subjects in order to attract more people and boost markets for middle-skilled workers.
http://www.economist.com/news/business-books-quarterly/21656632-how-americans-should-react-changing-world-situation-still-land
I agree mostly, Jennifer. Some of us took a Labor Economics course in the fall and within that class we studied the payoff of higher education in the US. Although tuition cost has risen, the payoff is still significantly higher than immediately entering the workforce after high school. Many of my friends back home have actually gone to trade schools and now work fulltime, well paying jobs.
DeleteAs for your widening gap stance, I have to ask what you mean by that. Are you refering to the US or other nations as well? Humans can be inherently greedy, but I believe the values of the US and most strong economies emphasize a strong middle class and people are beginning to wake up during this 2016 election. Even China is seeing an incredible growth of their middle class, while nations like Russia are regressing into radical oligarchy.