AN ECONOMIST LOOKS AT THE AMERICAN DREAM.
AN ECONOMIST LOOKS AT THE AMERICAN DREAM. This article by Paul Krugman points to a study which followed individual families in the United States for two generations. “According to one recent estimate, American children born to parents in the bottom fourth of the income distribution have almost a 50 percent chance of staying there — and almost a two-thirds chance of remaining stuck if they’re black.” The article points out the effect that poverty has on children, quoting a study that found: “many children growing up in very poor families with low social status experience unhealthy levels of stress hormones, which impair their neural development.” Kids, notice what would happen if the incomes of children were randomly distributed, so that the income of parents had no effect on the income of children. There would be a 25% chance that children of parents in the bottom quartile would wind up in the bottom quartile. And there would be a 25% chance that children of parents in each of the other quartiles would wind up in the bottom quartile.