Chart: economic mobility and inequality

[PETRUS]

The y axis, "Intergenerational earnings elasticity," is a measure of economic mobility. The lower on the axis, the more mobility.

The x axis is the GINI coefficient, a standard measure of inequality. The further to the right, the greater the inequality.



Not only does the US have more inequality than places like Germany, Japan, and Canada but it appears to be substantially more difficult to overcome the circumstances of one's birth.

[FreeJoe]

1. Is the scale right?

The why axis is labeled as a measure of "Intergenerational Earnings Elasticity". Based on that description, I would expect that higher numbers would correlated to higher elasticity. In other words, higher numbers would imply more ability to earn a different amount from what your parents earned. It looks backwards.

I also question how accurate it is. Denmark's earnings elasticity is near the very bottom of the scale. It appears that the scale is not 0 based (which implies someone was trying to goose the slope of the line), but it still puts Denmark very, very low. I don't know much about Denmark or the other Nordic countries, but I do have a lot of experience working with Canadians. They are below 0.2 on the scale. Again, I don't understand the exact measure being used here, but the implication is that what a Canadian earns has very little relationship to what their parent's earn. I don't doubt that their mobility is greater than it is in the US, but it isn't that strong. The majoriy of Canadians I know (admittedly not that large of a sample) are in roughly the same earnings group as their parents.

[PETRUS]

2. Source, explanation

The data is from Miles Korack's research.

The y axis is an expression of the percentage difference among a population's incomes and their parent's incomes. A "1" at the top of the scale is a 100% match to the parents' incomes. A ".5" is a 50% match, i.e. if your dad made twice what my dad made, then you would be making 50% more than I make.