How the Great Gatsby Curve Explains Social Mobility
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Understanding the Great Gatsby Curve
The figure, known as the “Great Gatsby Curve,” plots two variables: the x-axis measures inequality through the Gini coefficient, where higher values indicate greater inequality, while the y-axis measures intergenerational elasticity of income (IGE), where higher values mean less social mobility.
The main pattern is clear and positive — countries with higher inequality tend to have lower intergenerational mobility, meaning that in more unequal societies, a child’s economic future is more strongly determined by their parents’ income. Looking at specific countries, Nordic nations such as Denmark, Norway, Finland, and Sweden cluster in the low inequality/high mobility corner, while Latin American countries... Continue reading "How the Great Gatsby Curve Explains Social Mobility" »