Uncovering Gatsby Curves

Pier-André Bouchard St-Amant, Jean-Denis Garon, Nicolas Marceau
2020 Social Science Research Network  
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
more » ... 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.
doi:10.2139/ssrn.3526604 fatcat:doxczcrevbfidjgainbe2rqflm