Great Gatsby Curve

The Great Gatsby Curve

The Great Gatsby Curve is a concept in economics that illustrates the relationship between income inequality and intergenerational mobility. The term was coined by economist Alan Krueger in reference to the novel "The Great Gatsby" by F. Scott Fitzgerald. The curve visually represents the idea that countries with higher levels of income inequality tend to have lower levels of intergenerational mobility, meaning that children are less likely to move up the income ladder compared to their parents.

The curve itself is a graphical representation that plots the level of income inequality in a country against the level of intergenerational mobility. Countries that fall below the curve are considered to have higher levels of intergenerational mobility given their level of income inequality, while countries above the curve have lower levels of mobility.

Research on the Great Gatsby Curve has sparked debates about the impact of income inequality on social mobility and economic opportunity. Some argue that high levels of income inequality can create barriers for individuals to improve their economic status, leading to a less mobile society. Others suggest that factors beyond income inequality, such as education and social policies, also play a significant role in determining intergenerational mobility.

Critics of the Great Gatsby Curve point out limitations in its ability to capture the complexity of social mobility dynamics, as it focuses primarily on the relationship between income inequality and mobility without considering other important factors.

In conclusion, the Great Gatsby Curve serves as a visual representation of the relationship between income inequality and intergenerational mobility, highlighting the challenges that individuals face in moving up the economic ladder in societies with high levels of inequality.