Friday, November 18, 2011

Death of the American Dream

An essential tenet of the American Dream is social mobility, the ideal that any child in America, no matter how poor, can grow up to be financially successful or even become President of the United States. What does science have to say about social mobility in the U.S. today compared to other countries? Is the American Dream still alive and well or is it dying under the onslaught of a Republican tax war on the non-rich?

Quite a number of scientific studies have addressed the issue of social mobility in the U.S. and elsewhere. The usual metric of mobility is the correlation between the incomes of parents and offspring. What is the probability that the parent resides in the bottom quintile income wise and the child makes it into the top quintile? Or what is the probability that the child of a parent in the top quintile will wind up in the bottom quintile? If these probabilities are low, it is prima facie evidence for inequality of opportunity.

A comparative study by the Organization for Economic Cooperation and Development (OECD) last year found upward mobility in the United States significantly lower than in most major European countries. A 2006 study by the Institute for the Study of Labor in Germany concluded, "the U.S. appears to be exceptional in having less rather than more upward mobility." The 2010 Economic Mobility Project study found that the U.S. has a more rigid class structure than Canada.

The strength of the link between individual and parental earnings    

It's unanimous. The U.S. is no longer home to the American Dream. The social mobility most Americans cling to as an article of faith is a myth. Rich Americans are becoming a permanent aristocracy and it is harder than ever for children of disadvantaged families to break out of relative poverty and ascend the economic ladder. If you are looking for the American Dream, look to Denmark or Austria or Norway or Finland.

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  1. The American Dream was never available to the underprivileged minority groups. It was reserved only for white middle-class people to get to the upper echelon. Now, the middle class is getting decimated. So, the dream is becoming a nightmare. The others always lived the nightmare and somehow survived and kept their dignity. Hurray to them!

    1. Thank you kvnagarajan for stating what should be obvious, but is lost on most Americans.

  2. that's why it's called The American Dream, because if you are foolish enough to believe it, you are surely dreaming!