The American Dream is an enduring ideal that grips people all over the world. By its very definition, you seek it in the United States, the so-called land of opportunity. Plenty of people risk their lives and freedom to reach this country to make it come true.
At its heart, the Dream promises upward mobility; the opportunity to attain success no matter what situation you might be born into. In the emblematic American-created mythology, it’s the land of the self-made man. Perhaps at their core there was once a measure of reality, but now that is in serious doubt.
A new study says that today that kind of upward mobility and social and economic fulfillment is more likely to happen in Denmark, Germany, Australia, and the UK.
In a recent paper titled The Intergenerational Persistence of Poverty in High-Income Countries, academics at the Italian Bocconi University, the Danish Rockwool Foundation, and Stockholm University explored how poverty persists across generations in multiple countries.
Their findings suggest the American Dream is dead: “Intergenerational poverty in the U.S. is four times stronger than in Denmark and Germany, and twice as strong as in Australia and the UK,” they wrote.
The researchers’ measure of persistence of poverty in the US is 0.43, which means that “experiencing all of one’s childhood in poverty is associated with a 43 percentage point higher mean poverty exposure during early adulthood (relative to an adult with no child poverty exposure).” In Denmark, in contrast, it’s just 0.08.
That is, if you are born in poverty in the US you are much more likely to remain poor your entire life, while in Denmark there is a very good chance that you can pull yourself out of it.
Contrary to much of the rhetoric that politicians spout in the US, the researchers found this difference between countries has little to do with inequalities in education, nor is it based on racial discrimination or location, with the persistence of poverty in the US high across racial and geographic lines.
Instead, the researchers find that the persistence of poverty is strongly connected to tax rates and what they call transfer insurance effects, which can be considered as akin to a social safety net.
“The U.S. is the archetype of a liberal and residualist welfare state, featuring stratified access to higher education and employment, strong earnings returns to higher education, and a comparatively weak welfare state to insure against risks in adulthood,” the researchers said. The countries in which there is a greater likelihood of success typically have a stronger safety net.
This latest research echoes many other similar findings. Back in 2017 for example, Pedro Nicolaci da Costa wrote that the UK, Canada, and Denmark all offered a greater chance of social mobility than the US.
More recently, research published by the Federal Reserve Bank of Chicago found that the US has relatively low rates of intergenerational income mobility compared with other advanced economies, and that this mobility has been declining over the past forty years.
So yes, if you’re chasing the American Dream, you will find it in many countries, but not in the US.
