User:Mishellearakelian/sandbox

Income inequality and intergenerational earnings elasticity
Economist Miles Corak has documented a relationship called "The Great Gatsby Curve". In this measure, Corak has been able to plot the positive relationship between intergenerational mobility and inequality, and how this relates to the broader concept of equality of opportunity. Corack has stated that in Nordic countries, like Denmark, there is a statistically weak tie between the economic status and earnings of the parents and their adult children, since less than one-fifth of any economic advantage or disadvantage that a father may have had is passed on to an adult son. This “weak tie” is translated to mean that there is a low intergenerational earnings elasticity in Denmark, since there is a high level of social mobility and equality of opportunity.

Miles Corak believes that the Great Gatsby Curve should not be treated as a blueprint or model for making economic changes. Also, Corak notes that Denmark may not be the most appropriate model for comparison in analyzing economic policies since it has a small and relatively homogenous population, which is not easily comparable to large and demographically diverse countries such as the United States.

The Danish intergenerational elasticity of income is flat across the lower parts of the parental distribution, and then rises at the higher end. This means that being raised by a low-income father contributes to no earnings disadvantage, but being raised by a high-income father confers some advantage. This illustrates that there is still a high and strong transmission of economic status at the top income levels, even in the relatively mobile country of Denmark. Specifically, it is shown that the intergenerational transmission of earnings at the very top is associated with the intergenerational transmission of employers since sons of top-earning fathers are more likely to fall from the top strata if they do not work for the same employer that their father had worked for prior.

Danish income inequality and educational assortative mating
Danish income inequality is relatively low, yet the rate of educational homogamy has declined despite increasing levels of educational attainment. In research done by Richard Breen and Signe Hald Andersen, they have found that in Denmark, with a rather more regulated labor market, the education of an individual is more closely related to his or her income. These researches have found this to be particularly the case for women in Denmark. The authors develop this as a consequence of the highly developed Danish welfare state, and the subsequent high levels of participation of married women in the labor force. Approximately 87% of married women participate in the labor force, and this participation is generally uninterrupted for child rearing since there are extremely generous parental leave policies, as well as free or highly subsidized child daycare. Denmark presents a unique case since there is an illustrated causal link between the changes in educational assortative mating and earnings or income inequality.