A meta-analysis of the association between income inequality and intergenerational mobility

Our aim is to provide an overview of associations between income inequality and intergenerational mobility in the United States, Canada, and eight European countries (Denmark, Finland, France, Germany, Italy, Norway, Sweden, and the United Kingdom). We analyze whether this correlation is observed across and within countries over time. Developed countries have been experiencing increases in inequality in recent decades, mostly due to a steep concentration of income at the top of the distribution. We investigate Great Gatsby curves and perform meta-regression analyses based upon several papers on this topic. Results suggest that countries with high levels of inequality tend to have lower levels of mobility. Intergenerational income elasticities have stronger associations with the Gini coefficient, compared to associations with the top one percent income share. Once models are controlled for methodological variables, country indicators, and paper indicators, correlations of mobility with the Gini coefficient lose significance, but not with the top one percent income share. This result is an indication that recent increases in inequality at the top of the distribution (captured by the top one percent income share) might be negatively affecting mobility on a greater magnitude, compared to variations across the income distribution (captured by the Gini coefficient).