Uncovering Gatsby Curves

Pier-André Bouchard St-Amant, Jean-Denis Garon and Nicolas Marceau

No 8049, CESifo Working Paper Series from CESifo

Abstract: Empirical findings suggest a positive correlation between inequality and social immobility, a phenomenon coined the Gatsby curve. However, complete explanations of the phenomenon have not yet been proposed. This paper answers two questions: What are Gatsby curves? When do they exist? We build a theoretical environment in which parental investment and education improve the economic prospects of children. Gatsbian economies and Gatsby curves are formally defined, and we characterize the conditions under which they will arise. We show that an economy may go from being Gatsbian to non-Gatsbian. Finally, we show that the better network of relations of those with high-paying jobs may also generate a Gatsbian economy.

Keywords: intergenerational mobility; income inequality; education (search for similar items in EconPapers)
JEL-codes: D31 H52 J31 J62 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8049

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