Land of opportunity - Australia or US?

It's a widely-held belief that although there is a lot of inequality, anyone can make it to the top in America, no matter how humble their origins. However recently published research by Andrew Leigh of the Australian National University has found that going from rags to riches is more likely in Australia than in the USA, although we are less inclined to believe it. The SMH reported that 12% of Australian boys whose fathers lifetime income put them in the bottom 20% of the population had climbed into the top income bracket in their working lifetime. In contrast, similar data for the US showed that only 5% of sons could expect to make the jump in just one generation. [Sons incomes were compared to their fathers in the study because mothers had historically lower levels of participation in the workforce from which to make comparisons].

Despite the fact that upward mobility is greater in Australia than in the USA, 39% of Australians believe that poor people are trapped in poverty, compared to just 29% of Americans.

It doesn't pay to get too comfortable once you get into the top 20% of income though - the study also found that 17% of sons born to fathers in the richest 20 per cent of the population by income slipped into the poorest 20 per cent later in life.

Copyright Enough Wealth 2007