The bigger the gap between the rich and the poor, the harder it is for the poor to become rich, according to a new report.
High levels of income inequality are associated with low levels of economic mobility, University of Ottawa economist Miles Corak argues in a new report published by the Center for American Progress. The charts below help to illustrate his findings.
Note: The “intergenerational earnings elasticity” measure used in the charts describes the percentage of a parent’s relative income position that his or her child inherits. A higher elasticity means lower economic mobility, as this means a child’s relative income position as an adult is more determined by his father’s position than by other factors. All of the academic research in this area looks at father-son pairs because of data availability.
Check out five charts on income inequality and economic mobility from the Center for American Progress below: