The Land of Opportunity or Inequality? What the 'Great Gatsby Curve' Graph Shows

One graph claims to show the inverting relationship between inequality and opportunity. The Great Gatsby Curve sheds light on one of the key issues of our time. 

Inequality is one of the key issues of this year’s presidential election. It was the underlying issue behind the primary campaign of Bernie Sanders and has been mentioned often in the general election by both major candidates.  

Indeed, income inequality in the United States is as high as it has been since the 1920s according to economist Thomas Piketty. The growth of inequality has been pronounced since the 1970s both in scale and in speed. An occurrence so remarkable it has been called The Great Divergence.

What effect might this massive inequality have on us? What does this mean for us other than having to hear politicians ramble on? Will we have to settle for a new economic order in which massive inequality is the norm? Will it affect our way of life?

According to labour economist Alan Krueger, income inequality can have negative effects on social mobility. Effects negative enough to turn Scandinavia into the land of opportunity; and to leave the United States behind most of Western Europe in terms of mobility at birth. He explains the effect in his 'Great Gatsby Curve' graph; named ironically for the rags to riches title character of The Great Gatsby and his ability to advance in an unequal society.

On the vertical axis is the social immobility of a child born in each country. The higher it is the more influence your parents income has on your earnings as an adult. The lower it is, the more likely you are to move out of the income bracket that you are born into. On the other axis is the Gini coefficient, a measure of inequality in a country. The higher it is, the more concentrated wealth and income are.

The graph shows that among many countries there is a relationship between high income inequality and low social mobility. The countries in the lower left with the lowest inequality also have the highest mobility. The countries at the top right with the highest inequality have the least social mobility. As inequality increases, the chances of making much more money than your parents did decreases.

What does this mean for the current discussion of inequality? It means that if nothing is done the tendency of income to concentrate is liable to become more pronounced, as is the belief of Alan Krueger. He adds that the effect has likely already slowed the growth of the US economy, and could demoralize workers. It also means that inequality is only half the story, social mobility – and the policies which make it possible – have to be considered as well in the discussion.

Graph by BoogaLouie - Graph was creating using Excel. Source of data is Inequality from generation to generation the United States in comparison, CC BY-SA 3.0,

Income Inequality in the United States, 1913-1998" with Thomas Piketty, Quarterly Journal of Economics, 118(1), 2003, 1-39 (Longer updated version published in A.B. Atkinson and T. Piketty eds., Oxford University Press, 2007) (Tables and Figures Updated to 2015 in Excel format, June 2016)

Krueger, Alan B. "The Rise and Consequences of Inequality in the United States." (2012): n. pag.Https:// The White House. Web. 23 Aug. 2016.

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

Can the keto diet help treat depression? Here’s what the science says so far

A growing body of research shows promising signs that the keto diet might be able to improve mental health.

Public Domain
Mind & Brain
  • The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
  • Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
  • Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Keep reading Show less

Steven Pinker's 13 rules for writing better

The Harvard psychologist loves reading authors' rules for writing. Here are his own.

NEW YORK, NY - JULY 21: Steven Pinker speaks onstage during OZY Fest 2018 at Rumsey Playfield, Central Park on July 21, 2018 in New York City. (Photo by Brad Barket/Getty Images for Ozy Media)
Personal Growth
  • Steven Pinker is many things: linguist, psychologist, optimist, Harvard professor, and author.
  • When it comes to writing, he's a student and a teacher.
  • Here's are his 13 rules for writing better, more simply, and more clearly.
Keep reading Show less

Want to age gracefully? A new study says live meaningfully

Thinking your life is worthwhile is correlated with a variety of positive outcomes.

Surprising Science
  • A new study finds that adults who feel their lives are meaningful have better health and life outcomes.
  • Adults who felt their lives were worthwhile tended to be more social and had healthier habits.
  • The findings could be used to help improve the health of older adults.
Keep reading Show less