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To contrast the Great Gatsby Curve, the negative correlation between economic inequality and social mobility, countries with low social mobility such as Italy, the UK and US must not only promote quality educational opportunities, but also prevent a high level of inequality. How? By funding the initiatives with highly progressive taxation

If there is one single point on which all or almost all those studying social mobility appear to agree upon, it is that in a modern society access to high-quality education represents an essential factor of social promotion for those belonging to the less fortunate social strata. Consequently, some sort of public intervention is usually considered auspicious to guarantee that all have an adequate access to education, independently from the income level of their family of origin, in order to guarantee a sufficient level of “equality of opportunity”. Equality of opportunity favors upward social mobility and consequently, across time it tends to reduce economic inequality, given that income levels tend to be positively correlated with educational levels.

This apparently simple picture immediately becomes complicated if we look at the current situation. In fact, it is becoming ever clearer that education, although it is reasonably to be considered an essential agent of mobility, per se is not sufficient to contrast the ongoing tendency towards social immobility caused by high economic inequality. After all, the observed correlation between income and educational levels, which we can surely interpret “optimistically” (good education also allows those coming from the lower strata to earn high incomes), can be interpreted “pessimistically” instead if we hypothesize that the opposite mechanism prevails (those coming from higher-income families can afford to pay for better education for their children, guaranteeing that they will take their place at the top of the income pyramid). In a context of non-unidirectional causation, it is difficult to identify the relative importance of the various factors. However, for countries such as Italy – which stand out for having low mobility levels from both socio-economic and educational points of view – it is reasonable to imagine that education is no longer fulfilling its auspicious role of social elevator, and this is because the distribution of future educational levels (those of the generation of the children) tends to be determined by the distribution of today’s incomes (those of the generation of the parents). In other words, inequality tends to strangle socio-economic mobility.

The negative correlation between economic inequality and social mobility is known as the “Great Gatsby Curve”, after Jay Gatsby, the protagonist of a famous novel by the American writer Francis Scott Fitzgerald who narrated his difficulties in rising from the condition of relative poverty into which he had been born to high social status. Among countries positioned in the less-favorable areas of the Great Gatsby Curve we find many South American ones, such as Brazil or Chile, characterized by suffering from high inequality and high social immobility at the same. Among Western countries, those that tend to occupy the worst positions in this unfortunate ranking are the UK and Italy (especially due to their high immobility) on the one side, and the US (that stands out for being the most unequal among large Western countries) on the other side. At the other extreme, that is at the combination of low inequality and high social mobility, we find Sweden, Norway and Denmark.

It seems clear, then, that for countries with low social mobility that want to escape this condition, promoting equality of educational opportunities (generalized access to a good level of education) probably represents a necessary measure, but certainly not a sufficient one. In fact, it is also necessary to prevent that a high level of economic inequality makes it practically impossible to reduce the distances. The policies that might help achieve both objectives are clear: improve the quality of public education – of all types – funding related initiatives through strongly progressive taxation. In theory this would allow the levels of economic inequality to be reduced today, educational inequality to be reduced among those that will enter the labor market tomorrow, and in this way the future levels of economic inequality to be reduced further. However, this would require in practice to invert or at least to stop the current tendency, found across almost the whole of the West, towards the reduction of fiscal progressivity and the contraction of services provided to citizens – education included.

GUIDO ALFANI

Bocconi University
Department of Social and Political Sciences

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