Do children of poor parents stay poor more often where inequality is high?

In cross-country comparisons, yes: places with more inequality tend to be places where children's incomes stay closer to their parents' incomes. This pattern is called the Great Gatsby Curve. It describes a positive relationship between income inequality at one point in time and the persistence of income across generations. Plot each country's inequality on one axis and how strongly income passes from parents to children on the other, and the dots slope upward.

On the chart, the most equal countries, mostly Nordic ones, sit at the mobile end, and more unequal countries such as the United Kingdom show less upward mobility, with the United States in the middle. A 2012 study found a clear negative relationship between inequality and mobility: Denmark, Norway and Finland had some of the greatest mobility, Chile and Brazil some of the lowest.

The name has a story. The curve refers to F. Scott Fitzgerald's 1925 novel The Great Gatsby, and the economist Alan Krueger popularised it in 2012. One of the staff economists who made the chart said he suggested the name because of Gatsby's trouble trying to jump social classes in spite of his money, and a few colleagues teased him for the idea.

Why might it hold? The journalist Timothy Noah's picture is a ladder: it is harder to climb when the rungs are farther apart. But there is a sharp objection. The economist Greg Mankiw argued that the correlation is not surprising, and may be an artifact of comparing diverse countries with less diverse ones. So the chart shows a link, and economists argue about what it means.