Wednesday, January 17, 2018
Politics

U.S. trails many European countries in kids' income mobility

The statement

The United States is "behind many countries in Europe in terms of the ability of every kid in America to get ahead."

Steven Rattner, Dec. 16 on MSNBC's Morning Joe

The ruling

Oh, sweet America, ye land of opportunity, home to the time-tested formula in which hard work + perseverance = success, in spite of family background.

Or not. The new reality, as described in a Dec. 16 discussion on MSNBC's Morning Joe, is it's harder than ever for Americans born into low-income families to advance up the economic ladder.

We last heard a version of this talking point from President Barack Obama, who spoke about the dangerous consequences for America if income inequality continues to rise and income mobility decreases.

"In fact, statistics show not only that our levels of income inequality rank near countries like Jamaica and Argentina, but that it is harder today for a child born here in America to improve her station in life than it is for children in most of our wealthy allies, countries like Canada or Germany or France," Obama said. "They have greater mobility than we do, not less."

Alan Krueger, former chairman of the president's Council of Economic Advisers, explained the connection between economic mobility and income as the "Great Gatsby Curve," named after the novel about Prohibition-era upper-class excess by F. Scott Fitzgerald.

Families at all earning levels were growing together after World War II but have been growing apart in the decades since, Krueger wrote. The country's top earners have pulled a lot farther ahead than the middle and lower class, he said, and the trend line suggests the future earnings of today's children will be tied more and more to the income level of their parents.

Krueger compared income inequality of 10 developed countries with the correlation between a parent's income and their children's. The Gatsby Curve showed economic possibilities for children in European countries such as Finland, Norway, Denmark, Sweden, Germany and France were much less connected to their parents' income than in the United States and the United Kingdom.

Other research hits similar notes.

A 2011 report by the Pew Charitable Trusts' Economic Mobility Project described a joint study by researchers from 10 countries who looked at how children's mobility is connected to their family's socioeconomic background. Of the 10 countries studied, the United States had the strongest link between parents' education and a child's economic, educational and socioemotional outcomes, the study found, more pronounced than in the United Kingdom, France, Germany and Nordic countries, as well as Canada and Australia.

There are some caveats. Some conservative economists say comparisons between countries are imperfect and that Americans are doing just fine if you look at their ability to simply out-earn their parents.

But the preponderance of evidence backs up Rattner's point. Studies show that we are "behind many countries in Europe in terms of the ability of every kid in America to get ahead." Nordic countries particularly have higher rates of income mobility than the United States. We rate the statement Mostly True.

KATIE SANDERS, Times staff writer

Edited for print. Read the full version at PunditFact.com.

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