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SECTION 1 2 3<br />
EXTREME INEQUALITY<br />
In countries with higher levels of inequality it is easier for parents to pass on<br />
their advantages to their children; advantages that less wealthy parents<br />
cannot afford. 219 The clearest example of this is expenditure on education.<br />
Wealthier parents often pay for their children to attend costly private schools<br />
that then facilitate their entry into elite universities, which in turn help them<br />
secure higher paid jobs. This is reinforced by other advantages, such as the<br />
resources and social networks that richer parents share with their children,<br />
which further facilitate employment and education opportunities. In this way,<br />
the richest capture opportunities, which then become closed off from those<br />
who do not have the means to pay. 220<br />
Figure 7 demonstrates the negative relationship between rising inequality and<br />
diminishing social mobility across 21 countries. In Denmark, a country with<br />
a low Gini coefficient, only 15 percent of a young adult’s income is determined<br />
by their parent’s income. In Peru, which has one of the highest Gini coefficients<br />
in the world, this rises to two-thirds. In the USA, nearly half of all children born<br />
to low-income parents will become low-income adults. 222<br />
“<br />
If Americans want to live<br />
the American dream, they<br />
should go to Denmark.<br />
RICHARD WILKINSON<br />
CO-AUTHOR OF THE SPIRIT LEVEL 221<br />
“<br />
FIGURE 7: The Great Gatsby Curve: The extent to which parents’ earnings<br />
determine the income of their children 223<br />
0.8<br />
Intergenerational earnings elasticity<br />
0.7<br />
0.6<br />
0.5<br />
0.4<br />
0.3<br />
0.2<br />
0.1<br />
0<br />
Japan<br />
Pakistan<br />
Switzerland<br />
France<br />
Germany<br />
Sweden<br />
Norway Finland Italy<br />
Denmark<br />
China<br />
Spain<br />
New Zealand<br />
Australia<br />
Canada<br />
Chile<br />
Argentina<br />
USA<br />
Singapore<br />
United Kingdom<br />
20 25 30 35 40 45 50 55 60 65<br />
Gini coefficient<br />
Peru<br />
Brazil<br />
In Pakistan, social mobility is a distant dream. A boy born to a father 224 from the<br />
poorest 20 percent of the population has a 6.5 percent chance of moving up to<br />
the wealthiest 20 percent of the population. 225<br />
In many countries, social mobility for women and marginalized ethnic groups is<br />
a virtual impossibility due to entrenched discriminatory practices, such as the<br />
caste system in India, which are compounded by economic inequality. 226<br />
Policies designed to reduce inequality can provide opportunities to poor<br />
children that were denied to their parents. Education, for example, is widely<br />
considered to be the main engine of social mobility, 227 as those with more<br />
48