Lecture 24 Social Mobility

Question 1

intergenerational earnings elasticity (IEE)

Answer 1

measures how much parents’ income matters in determining childrens’ income when adults
(IEE = 0.4 means that if the parents’ income increases by 1%, the child’s will increase by 0.4%)

Question 2

IEE equation

Answer 2

IEE = d(ln(ychild) / d(ln(yparent))

Question 3

countries with high social mobility

Answer 3

Denmark, Finland, Canada, Germany, Sweden

Question 4

countries with high social mobility

Answer 4

UK, US, South Africa, Brazil

Question 5

how does the lack of social inequality and mobility feed each other

Answer 5

high inequality means it’s more and more challenging for low-income children to succeed, which leads to high intergenerational persistence

Question 6

the inequality of opportunity project

Answer 6

using “big data” to study long-run inequality (tax and security records)
question: is america’s reputation as the “land of opportunities” warranted?
answer: overall no, although there is substantial variation in intergenerational mobility across areas in the US

Question 7

geography of mobility in the US

Answer 7

where you grow up as massive consequences for your future: high mobility in the midwest, low mobility in the south

Question 8

why is social mobility so much higher in some reasons than others?

Answer 8

places: some places generate little opportunities for upward mobility (local school quality, taxes, employment structure, residential segregation, etc)
people: the people that live in particular locations are less likely to be upwardly mobile (discrimination, culture, tastes and beliefs, family structure, etc)

Question 9

racial differences

Answer 9

holding parents’ income fixed, upward mobility is relatively low in community zones (CZ) where the share of the black population is large. the authors show that white children also have lower mobility in the CZ with a larger black share. therefore: PLACES, not people