In this article, Alana Semuels discusses research by Miles Corak and others on inequality and mobility.


The numbers are sobering: People born in the 1940s had a 92 percent chance of earning more than their parents did at age 30. For people born in the 1980s, by contrast, the chances were just 50-50.

The finding comes from a new paper out of The Equality of Opportunity Project, a joint research effort of Harvard and Stanford led by the economist Raj Chetty. The paper puts numbers on what many have seen firsthand for years: The American dream—the ability to climb the economic ladder and achieve more than one’s parents did—is less and less a reality with every decade that goes by.

The problem is less with the existence of such wealth than with how it is created and preserved. For one thing, people at the top are able to use their ample resources to help their children get ahead and stay in their parents’ income bracket. People on the lower rungs of the economic ladder can’t access the same resources. “The relatively rich will skew the chances that their children will do better,” said Miles Corak, a Canadian economist who has studied how inequality informs intergenerational mobility. As children make their way through the education system, their parents’ financial situation tends to inform how successful they are: A child with a nanny, access to pre-school, a tutor, and paid-for college tuition will likely have more professional success in life than a poor child.

Corak says that in his native Canada, the wealthy and poor alike are invested in the same system and ensure that it benefits everyone, whether rich or poor. “If everyone buys into the system, you have advocates for that system to ensure it stays that way,” Corak said.

Read the entire article by Alana Semuels in The Atlantic.