LSE CEP LSE
Centre for Economic Performance (CEP)

Abstract for:

Inequality and opportunity: the return of a neglected debate

Stephen  Machin,  John  Van Reenen,  October 2012
Paper No' CEPUSA004: | Full paper (pdf)
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Keywords: inequality; social mobility, fiscal crisis, US Election, USA, unemployment

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Abstract:

During this election period many Americans are feeling angry towards the very rich, especially those working in the financial sector, who helped cause the Great Recession and yet were bailed out by the government. Increases in inequality might be tolerable at a time of growing consumption for all, but they become less acceptable when the unemployment rate has hit 10% and real wages continue to stagnate. The chances that those who are born poor will escape from poverty are lower now in the US than in almost any other OECD country. However, neither of the presidential candidates is clear about how they would tackle the fundamental causes of the enormous shift in the US income distribution.



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