The Great Gatsby Curve

Andros Kourtellos, Chih Ming Tan and Steven Durlauf
Additional contact information
Andros Kourtellos: Department of Economics, University of Cyprus, Nicosia, Cyprus
Chih Ming Tan: Department of Economics & Finance, University of North Dakota, Grand Forks, North Dakota, USA

Annual Review of Economics, 2022, vol. 14, issue 1, 571-605

Abstract: This paper provides a synthesis of theoretical and empirical work on the Great Gatsby Curve, the positive empirical relationship between cross-sectional income inequality, and persistence of income across generations. We present statistical models of income dynamics that mechanically give rise to the relationship between inequality and mobility. Five distinct classes of theories are developed, including models on family investments, skills, social influences, political economy, and aspirations, each providing a behavioral mechanism to explain the relationship. Finally, we review empirical studies that provide evidence of the curve for a range of contexts and socioeconomic outcomes as well as explore evidence on mechanisms.

Keywords: Great Gatsby Curve; equality of opportunity; inequality; intergenerational mobility (search for similar items in EconPapers)
JEL-codes: D31 D63 J62 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: The Great Gatsby Curve (2022)
Working Paper: The Great Gatsby Curve (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:anr:reveco:v:14:y:2022:p:571-605

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DOI: 10.1146/annurev-economics-082321-122703

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