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In a 2011 Vanity Fair article, Nobel-Prize winning economist Joseph Stiglitz wrote:

America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe.

These terms aren't well defined, but we can make some assumptions about what he means. A household in the bottom income quintile makes at most about $20k, and on average $11k, which is below the poverty guideline for a family of four. This seems to be a reasonable division for a poor individual. A middle-class household in the middle income quintile makes between $38k-$62k, and about $50k on average, so that should suffice. The trickiest part of the statement is what is meant by the "top". The article goes to great lengths talking about the Top 1%, so I assume that is what he is referring to by top. In 2009, the bottom cut-off for the Top 1% Adjusted Gross Income was $343,927. Another possible point of contention is the differences between wealth and income. The article uses both terms, but appears to mostly be concerned with income inequality, so for the purposes of this question I am concerned with income.

From previous studies, we know what the chances are for someone from the bottom/middle income quintile to make it into the Top 1%. It is about 0.2%/0.3% from 1996-2005 in the USA.

Are their any nations in Europe whose citizens have a greater than 0.2%/0.3% chance of going from a bottom/middle income quintile for their country to the top 1% for their country?

  • Stiglitz won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, not a Nobel prize. – liftarn Jul 2 '14 at 7:46
  • @SVilcans, what is the difference? That prize seems to be awarded by the Nobel organization, wouldn't that by definition make it a Nobel prize? – user1873 Jul 2 '14 at 14:45
  • A Nobel prize is one of the prizes founded by Alfred Nobel in his will. Other prizes may have similar names such as the Bank of Sweden prize (sometimes called Nobel prize in economics) or the Right Livelihood Award (sometimes called the alternative Nobel prize). – liftarn Jul 2 '14 at 14:59
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    I think that the title could be improved. When I first read it, I was thinking: this is a tautology! 1% is 1%! How can more people make it in to the top 1%? Your question appears to be about whether lower income people can make it to the highest level. Yes, but by definition, only if higher income people fall out of it. Is this good, or bad? I think that "making the pie bigger" is a better focus for improvement than churn. – user29285 Mar 22 '16 at 23:48
  • @nocomprende, you can thank our benevolent overlords, the title used to read, "Do Europeans have a greater chance of making it into the top 1% of income earners in the USA?" which is slightly bad, because it doesn't identify who Europeans are being compared to (Americans), but it could be determined from context. I was asking which is more likely growing up in the USA in the lower income quintiles and ending up in the top 1% USA incomes OR growing up in the lower quintiles in Europe and ending up in the top 1% of USA incomes(not top 1% of Euro incomes). my meaning was changed – user1873 Mar 24 '16 at 4:47
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Shorrocks' Index is one mechanism used to compare the economic mobility of households within an economy.

A 2002 working paper from the European Economy Group, titled Europe vs. The United States: Is There a Trade-Off Between Mobility and Inequality? uses Shorrocks' Index and other measures to conclude:

Most of the indicators present Italy and France as the countries with the highest and lowest mobility, respectively. Contrary to general belief, the USA is shown to have intermediate levels of mobility within an international context. Whatever the case, the most significant result is the absence of any clear relationship between inequality and mobility. Examples of greater than average inequality and mobility have been seen, as have examples of low inequality and high mobility.

This is supported by a bilateral comparison from the last century: Wealth Dynamics in the 1980s and 1990s: Sweden and the United States, which says in its abstract:

In addition to less inequality and a higher median wealth, we also show that wealth quintile mobility in the 1990s has been 25.7 percent higher in Sweden [than the USA], as measured by Shorrocks' Index.

While these figures do not, unfortunately, focus directly on the OP's formulation of the question, which limits itself to the top 1%, it does provide strong evidence that the mobility of households from the lower quintiles to the upper ones is both lower and higher in European countries than the United States of America, as suggested by the original quote.

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    Interestingly, the Sweden/USA comparison also said, "After making these adjustments, they conclude that decile mobility is roughly the same in both countries but that dollar wealth mobility is much higher in the United States." It also makes mention of the fact that the top 1% have a much lower $amount than the USA, so if Stiglitz was speaking of the chances of moving from the poor/middle-class in Europe to the top in the USA, it would be much more difficult. – user1873 Jul 9 '13 at 5:33

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