policymakers demonstrate

540 Alain Trannoy
Poland. In France and Germany, the tax-and benefit system has achieved an
amount of redistribution which remains more or less constant along the period.
In 2010, the ratio of after- to pre-tax inequalities ranged from 0.54 to 0.68,
while it belonged to the 0.48–0.80 band in 1985.
The redistributive powerfulness of the state is lower in other advanced countries,
0.69 in Japan, 0.71 in Australia, 0.72 in Canada and 0.76 in the US: EU
countries have seemed to converge to a degree of redistribution that is higher
than in other advanced regions. This is quite good news for the promotors of a
building up of a ‘European Union of social states’ since it points out through
a revealed preference argument that the redistributive preferences of citizens
in different European countries are getting closer. This is an important building
step in the movement to a more integrated Europe and it is interesting to
note that this trend is not limited to countries belonging to the Eurozone. On
a more cautionary note, it remains to be seen whether the current crisis in the
Eurozone will undermine this convergence process. The reforms of the welfare
state which are underway in Britain can reverse the current trend for this country.
Once again, it should be added that a constant redistributive power has not
been enough to prevent an increase in inequality in Europe. It can be argued,
however, that the system should have become more redistributive to countervail
the rise in primary income inequality.
12.4.4 Inequality of Opportunity and Intergenerational Mobility
Intergenerational mobility and equality of opportunity are related concepts. We
begin by reporting empirical evidence about the former concept for which we
have accumulated more results. The global picture appears to be the following.
The US has long had the reputation of being the land of opportunities. When
looking at the data, the current situation is much less impressive. Nordic countries
clearly perform better; Southern European countries perform not much
better than the US; continental European countries are in between. At first
glance, the ranking of countries is not so different from the ranking in terms
of income inequality and indeed the correlation is high, but still the scattered
diagram in the space income inequality, intergenerational mobility is far from
being lined up as illustrated by Figure 12.12. The comparison of Canada, Australia
and France is instructive in this respect. Although they were in the same
league in 1985 for disposable income inequality (Gini index), Figure 12.12
reveals that these three countries are in a very different position in terms of
intergenerational mobility. This concept is approached by the intergenerational
income elasticity, which measures the extent to which offspring income levels
reflect those of their parents. More precisely, it shows how a marginal gain
of parent income (usually the father) is translated 30 years later in a marginal
gain in descendant income (usually the son). The value of this elasticity is low