EconTalk

James Heckman on Inequality and Economic Mobility

Jul 26, 2021
James Heckman, a Nobel Laureate and distinguished economist from the University of Chicago, delves into the complex relationships between inequality and economic mobility. He shares insights from Danish welfare state research, arguing that despite its educational access, economic mobility remains similar to that in the U.S. The discussion critiques the influence of family dynamics on children's outcomes and the challenges of public policies. Heckman also contrasts the American Dream with European experiences, emphasizing the need for systemic changes beyond welfare supports.
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INSIGHT

Family Influence on Mobility

  • Intergenerational mobility in skills and life strategies is similar in Denmark and the US, despite Denmark's welfare state.
  • Family influence remains strong in Denmark, impacting children's outcomes regardless of social programs.
INSIGHT

Family Life's Importance

  • Family life crucially shapes children's success or failure, a factor often ignored in US policy discussions.
  • Ignoring family influence leads to policies that miss a fundamental source of inequality.
ANECDOTE

Unintended Consequences of Danish Policy

  • A Danish program aimed at disadvantaged children inadvertently discouraged school attendance and work.
  • While providing short-term equality, it led to lower skills and disincentivized achievement in the long run.
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