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The American dream is more feasible in this country (and the weather is beautiful too)



The United States has been overtaken by Australia as a land of opportunity where no matter who your parents are, says a new report.

According to the authors, a detailed analysis of intergenerational earnings conducted by a team of Australian mathematics, finance and economics professors indicates that economic mobility from one generation to the next is higher.

"We find that Australia is more mobile than the United States, regardless of the approach used," they write in the latest issue of the Australian's Economic Record, a journal published by the Economic Society of Australia. The study, titled Direct Measures of Intergenerational Income Mobility in Australia, was conducted by mathematics professor Chelsea Murray and economics professor Silvia Mendolia of Wollongong University, the professor Robert Graham Clark of the Australian National University of Canberra and Peter Siminski Professor of Economics at the University of Wollongong. Sydney University of Technology.

The report will make a troubling or alarming read for Americans who see the United States as a land of pioneers and entrepreneurs, where everyone can "pull themselves out" to realize the American dream. (For some, the American dream means creating something from scratch, for others it's about home ownership, and for some, it's simply about achieving financial security. )

Shockingly, the United States is between 28% and 53% less economically mobile than Australia, depending on the measures used. It's one thing to suspect that this opportunity is not what it should be: it's another to receive evidence that another country is apparently doing it better.

The researchers compared the economic situation of children to that of their parents, based on two major national household surveys: the Australian Households, Income and Labor Survey or HILDA, conducted by the University of Melbourne (Australia) since 2001 and the University of Toronto. A panel survey on Michigan income dynamics, in progress since 1968.

To quantify "economic mobility", they compared the relative incomes of parents and their children using different measures, including gross income, disposable income, and income relative to the rest of the population – in others. In other words, the probability you will end up, for example, in the 20th percentile by income, if your parents were in the 20th percentile for their generation. All measures ranged from 0 to 1. A reading of zero would mean a country where there is absolutely no correlation between the economic outcomes of parents and those of their children: the children of the poor are just as likely to become rich as children's children. rich. A country that reads one is essentially feudal: you find yourself in exactly the same situation as your parents, without exception.

Bottom line? On the broadest plane, the United States was between 0.31 and 0.38, which means that we are about two-thirds of the path of feudalism to the perfect opportunity. Australia, on the other hand, is between 0.22 and 0.28. Researchers suggest that two factors hinder American mobility: growing economic inequality and the growing importance of university degrees. Inequality means you have to move further to climb the ladder. In the meantime, diplomas occupy such an important place in professional careers that those who do not go to school do not have access to many, if not most, means of promotion.

This is not the first study to argue that America's status as a "country of opportunity" par excellence can be overestimated. Many political analysts say frustration over lack of opportunity played a role in Donald Trump's surprise election victory.

All economic and social studies such as this one are accompanied by a warning. They are subject to measurement errors and assumptions and involve some degree of conjecture.

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