Intergenerational mobility is lower in the United States than in Canada, but the border only partially distinguishes the two countries with mobility varying significantly within each. The within-country differences and similarities hint at some of the reasons why the United States has lower social mobility than many other rich countries.
This is the main theme of a study released by the National Bureau of Economic Research, based upon Canadian data my co-authors and I constructed with the cooperation of Statistics Canada. Our research offers a more accurate comparison between these two countries than any cross-country comparisons made in the literature to date: tax-based administrative data, used to define similar measures of income, and coming close to covering the total population of similarly aged young people and their parents.
We cluster more than 1,000 communities in these two countries—709 American Commuting Zones and 288 Canadian Census Divisions—into four broad regions according to their similarity across a comprehensive set of five different measures of intergenerational income mobility, all referring to the strength of the tie between parent incomes and child adult incomes.
Public opinion polls suggest that Canadians and Americans share basic attitudes toward inequality and opportunity, and toward the underlying drivers of upward mobility. If there is such a thing as the “Canadian Dream,” it would look very much like what Americans say is the “American Dream.”
The Pew Charitable Trusts conducted a number of public opinion polls asking Americans what meaning they attach to the phrase “The American Dream,” and these have been adapted and conducted in Canada with remarkably similar responses.
In these polls respondents were asked to indicate the degree to which they agreed with a series of possible definitions of the American Dream. Sixty percent of American respondents ranked “being able to succeed regardless of family background” eight or higher on a ten point scale, while 59 percent of Canadians did so. The percentage indicating that the statement “Your children being financially better off financially than you” represents the American Dream was 64 percent in the United States, and 57 percent in Canada.
These two options relate most directly to social mobility as measured by social scientists, and the country differences in responses to them are not statistically significant. In fact, this was the case for the ratings given to all but one of the other ten options presented to these representative samples, Americans ranking “Owning your own business” more highly.
If this is the case for equality of outcomes, then it is surely also so for equality of opportunity; the significant differences in social mobility between the rich countries hinting at the role governments play in determining the degree to which family background is destiny, the rich raising the next generation of rich adults, the poor seeing their children face low chances of upward mobility.