Comments on: Equality of Opportunity

By: Peter Whiteford

Peter Whiteford — Wed, 26 Aug 2009 03:35:32 +0000

The source for the OECD is http://www.oecd.org/dataoecd/27/28/38335410.pdf

If you Table 1 on page 39, you will see that the main explanation is that the US has the lowest mobility at the bottom of the distribution, but at the top it is not dissimilar to Sweden, so my interpretation is that ther is lower mobility for th low paid in the US

By: Fred Argy

Fred Argy — Tue, 25 Aug 2009 23:00:31 +0000

Thanks Peter and Bruce. It indicates that inter-country comparisons of social mobility are more than a little suspicious.

But there is one consistent indicator – the relative weakness of social mobility in the USA. That does need some explanation.

By: Bruce Bradbury

Bruce Bradbury — Tue, 25 Aug 2009 10:35:01 +0000

Thanks for the correction James. Incidentally, I should have pointed out that the figure from this handbook shown above places the UK in quite a different position to the OECD study mentioned by Peter W.

By: James Rice

James Rice — Tue, 25 Aug 2009 09:30:05 +0000

Just a small correction: that’s the Oxford Handbook of Economic Inequality (rather than Income Distribution).

By: Bruce Bradbury

Bruce Bradbury — Tue, 25 Aug 2009 02:19:18 +0000

Here is the Figure that should have been included in the previous post.

[img]http://clubtroppo.com.au/wp-content/uploads/2009/08/Intergen.png[/img]

By: Bruce Bradbury

Bruce Bradbury — Tue, 25 Aug 2009 00:32:44 +0000

Leigh’s estimates, as with much of this literature, are not very precise. (A limitation of the two-stage method used). The figure below shows intergenerational income elasticities for several countries (from the Bjorklund and Jantti chapter in the Oxford Handbook of Income Distribution). Higher values mean less mobility. The figure also shows the 95% confidence intervals – which are generally very wide.

The best one can say is that the countries seem to fall into two groups in terms of intergenerational elasticities – France, USA and Italy with more intergenerational persistence (less mobility) vs the rest. Eye-balling the figure, I would guess that Australia is probably (just) significantly different from these 3 countries at the 5% level.

[fig to come]

By: Peter Whiteford

Peter Whiteford — Mon, 24 Aug 2009 15:43:06 +0000

Fred

While the OECD report used the earlier version of Andrew Leigh’s elasticity estimates, an elasticity of 0.25 is about the same level as Sweden and lower than Germany. The other Nordic countries and Canada have much lower elasticities than Sweden. Great Britain is actually less mobile than the USA with elasticities around 0.40 and 0.50 respectively.

So even if we are not at the Danish level we appear to be more mobile than the UK or the USA. (Assuming it is safe to generalise on the basis of a limited number of studies.)