Mar 22,2018 – JORDAN TIMES – Stefanie Stantcheva
To many observers, US Republicans’ recent passage of a sweeping tax bill was out of step with the country’s needs. With inequality worsening, would not most Americans want to close the income gap by instituting a more progressive tax system?
Surprisingly, the answer is no.
Americans have a deep-seated, optimistic view of social mobility, rooted in history and rags-to-riches narratives. Today, however, that view is based more on myth than on fact.
According to survey research that colleagues and I recently conducted and analysed, Americans estimate that among children in the lowest income bracket, 12 per cent will make it to the top sometime in their lifetime. Americans also believe that with hard work, only 22 per cent of children currently in poverty will remain there as adults.
In fact, only 8 per cent of poor kids will make it to the top, and 33 per cent will remain in poverty. In other words, Americans overestimate upward social mobility, and underestimate the likelihood of staying poor for generations.
Americans seem somewhat unique in this respect. In Europe, many people are more pessimistic about social mobility. Unlike Americans, most Europeans overestimate the odds of remaining in poverty.