Long-term Estimates and International Comparisons of Intergenerational Income Upward Mobility:A Discussion on the Theoretical Mechanisms and Characteristic Differences of the Great Gatsby Curve
Intergenerational mobility portrays a family's ability to move up or down the socioeconomic ladder over one or several generations and reflects the state of social opportunity equality.It is crucial for understanding the dynamic evolution of social innovation,economic development,and income distribution.However,providing a comprehensive description of intergenerational income mobility across global economies has been a persistent challenge.This difficulty arises primarily due to the lack of micro-level longitudinal survey data necessary for estimating intergenerational income mobility in most developing economies.This paper introduces a novel method to estimate intergenerational upward mobility without relying on panel data.This method only requires the marginal income distribution from cross-sectional data.By parameterizing a Copula with the intergenerational correlation coefficient,it can estimate reliable intergenerational upward mobility rates.Empirical verification in this paper shows that this Copula-based estimation method is insensitive to the correlation coefficient,which reflects relative intergenerational mobility.Even if the correlation coefficient is biased,this method can still yield relatively accurate intergenerational upward mobility rates without altering the trend of the series.Utilizing annual income distribution data from the World Inequality Database(WID)and intergenerational education correlation coefficients from the Global Database on Intergenerational Mobility,this paper estimates intergenerational upward mobility for 125 global economies.This includes a long-term series of intergenerational upward mobility rates for 22 economies,spanning cohorts from 1910 to 1992.The findings indicate that after the reform and opening-up,China has achieved a high and steadily growing level of intergenerational upward mobility on an international scale.For the 1980-1992 cohorts,the average intergenerational upward mobility rate was approximately 86.16％,exceeding the global,developed economies,and developing economies'averages by 23.62,20.29 and 24.62 percentage points,respectively.Observations of long-term trends in major global economies reveal that most developed economies,such as the United States,experienced rapid growth in intergenerational upward mobility for pre-World War Ⅱ cohorts,followed by a continuous decline for post-war cohorts.Counterfactual analysis decomposing the trends of intergenerational upward mobility rates for the 1980-1992 cohorts in China,the United States,Japan,and India shows that the intensification of inequality since the 1980s has negatively impacted intergenerational upward mobility rates in these countries.The high intergenerational upward mobility rates in China and India are mainly driven by rapid economic growth.Using the estimated global intergenerational upward mobility rates,this paper re-examines the Great Gatsby Curve.The findings confirm that the downward-sloping curve described by Corak(2013)is evident among the sample of developed countries.However,the curve is flatter among developing economies,with no significantly negative relationship observed.This paper briefly explains the various mechanisms behind the formation of the Great Gatsby Curve and the possible reasons for its different characteristics across sample types.In developed economies,wage compression means that the"incentive effect"of inequality is much smaller than its"distance effect",leading to a more pronounced negative relationship between inequality and upward mobility.In contrast,the significant differences in skill wage premiums among developing economies result in higher inequality coexisting with higher intergenerational upward mobility rates.The marginal contributions of this paper are as follows.Firstly,this paper verifies the insensitivity of intergenerational upward mobility rates to relative intergenerational mobility parameters,examining the robustness and accuracy of the Copula method across a broader sample of economies.Secondly,this paper calculates the intergenerational upward mobility levels for most global economies,summarizing the evolutionary patterns of intergenerational income upward mobility across different types of economies worldwide.Thirdly,this paper tests the existence of the Great Gatsby Curve,revealing characteristic differences between developing and developed economies.It reviews the mechanisms behind the Great Gatsby Curve,explaining the characteristic differences from the perspective of skill-biased technological progress.
intergenerational income upward mobilityCopula methodcounterfactual analysisthe Great Gatsby Curve
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