Cross-Country Intergenerational Status Mobility: Is there a Great Gatsby Curve?

Countries with greater income inequality also tend to have less intergenerational mobility. This relationship, as referred by Krueger (2012), is called “The Great Gatsby Curve.” Criticisms on this curve have brought to notice several limitations of previous studies: a few number of observations; short gap of time between measured inequality and immobility; heterogeneous databases; and model-based estimates of immobility. To correct for some of these limitations, we test for the impact of past income inequality on intergenerational social status persistence using the International Social Survey Program (2009). In accordance with previous studies, we find a positive relationship between these two variables, though the relatively poor model fit suggests the presence of other factors. In this respect, we find that past economic freedom has a negative and significant impact on social status persistence, while previous growth is not significant.