Rugged Inequality
The Myth of Nordic Mobility: Social Mobility Rates in Modern Denmark and Sweden
Gregory Clark & Martin Hørlyk Kristensen
Comparative Economic Studies, forthcoming
Abstract:
In this paper, we estimate social mobility rates, free of measurement errors, using register data for Denmark and Sweden, 1968 to 2021. To correct for measurement error attenuation, we take ratios of the correlation of relatives at different locations in family trees, such as cousins relative to siblings. Three things emerge from these estimates. First, social mobility rates in both Denmark and Sweden are much lower than conventionally estimated. Second, these countries, despite their reputation for high social mobility rates, have only modestly less persistence as in modern England, or also nineteenth century England or Sweden. Finally, in all the cases observed, marital assortment is much stronger than conventionally estimated, and this helps explain the low rates of intergenerational mobility.
The Social Origins of Effort: How Incentives Reduce Socioeconomic Disparities among Children
Jonas Radl et al.
American Sociological Review, February 2026, Pages 89-122
Abstract:
Cognitive effort (i.e., the mobilization of mental resources for task performance) is essential to equality of opportunity and meritocracy because it epitomizes individual agency. However, sociological theories of social inequality in effort are scarce and partial, and available empirical measures of effort are unreliable and lack validity. We fill this lacuna by (1) elaborating a theoretical account of how socioeconomic status (SES) affects children’s cognitive effort, (2) developing a novel research design for measuring effort using simple-yet-demanding behavioral tasks and varying incentive conditions, and (3) presenting evidence based on this laboratory design featuring 1,360 5th-grade students. We theorize that greater material abundance and lower environmental threat reduce the subjective costs of exerting effort for higher-SES children, and that parental socialization emphasizing autonomy gives them more intrinsic motivation compared to lower-SES children. Conversely, we posit that the effort of lower-SES children is more susceptible to material and status rewards. Supporting our expectations, we find that social origin effects on effort are largest when incentives are absent, yet decrease notably when material incentives are introduced. Albeit surprisingly modest and malleable, social origin effects on effort challenge voluntaristic notions of individual agency. Crucially though, providing tangible performance rewards can significantly narrow socioeconomic disparities in effort.
Creating High-Opportunity Neighborhoods: Evidence from the HOPE VI Program
Raj Chetty et al.
NBER Working Paper, January 2026
Abstract:
We study whether low-economic-mobility neighborhoods can be transformed into high-mobility areas by analyzing the HOPE VI program, which invested $17 billion to revitalize 262 distressed public housing developments. We estimate the program’s impacts using a matched difference-in-differences design, comparing outcomes in revitalized developments to observably similar control developments using anonymized tax records. HOPE VI reduced neighborhood poverty rates by attracting higher-income families to revitalized neighborhoods, but had no causal impact on the earnings of adults living in public housing units. Children raised in revitalized public housing units earned more, were more likely to attend college, and were less likely to be incarcerated. Using a movers exposure design and sibling comparisons, we show that these improvements were driven by changes in neighborhoods’ causal effects on children’s outcomes. The improvements in neighborhood causal effects were driven in large part by changes in social interaction: HOPE VI increased interaction between public housing residents and peers in surrounding neighborhoods and increased earnings more for subgroups with higher-income peers. Many low-income families in the U.S. currently live in neighborhoods that are as socially isolated as the HOPE VI developments were prior to revitalization. We conclude that it is feasible to create high-opportunity neighborhoods and that connecting socially isolated areas to surrounding communities is a cost-effective approach to doing so.
Poverty and Dependency in the United States, 1939–2023
Richard Burkhauser & Kevin Corinth
NBER Working Paper, January 2026
Abstract:
We compare trends in absolute poverty before (1939–1963) and after (1963–2023) the War on Poverty was declared. Our primary methodological contribution is to create a post-tax post-transfer income measure using the 1940, 1950 and 1960 Decennial Censuses through imputations of taxes and transfers as well as certain forms of market income including perquisites (Collins and Wanamaker 2022), consistent with the full income measures developed by Burkhauser et al. (2024) for subsequent years. From 1939–1963, poverty fell by 29 percentage points, with even larger declines for Black people and all children. While absolute poverty continued to fall following the War on Poverty’s declaration, the pace was no faster, even when evaluating the trends relative to a consistent initial poverty rate. Furthermore, the pre-1964 decline in poverty among working age adults and children was achieved almost completely through increases in market income, during which time only 2–3 percent of working age adults were dependent on the government for at least half of their income, compared to dependency rates of 7–15 percent from 1972–2023. In contrast to progress on absolute poverty, reductions in relative poverty were more modest from 1939–1963 and even less so since then.
Automation Experiments and Inequality
Seth Gordon Benzell & Kyle Myers
NBER Working Paper, January 2026
Abstract:
Many experiments study the productivity effects of automation technologies such as generative algorithms. A key test in these experiments relates to inequality: does the technology increase output more for high- or low-skill workers? However, the theoretical content of this empirical test has been unclear. Here, we formalize a theory that describes the experimental effect of automation technologies on worker-level output and, therefore, inequality. Worker-level output depends on a task-level production function, and workers are heterogeneous in their task-level skills. Workers perform a task themselves or delegate it to the automation technology. The inequality effect of improved automation depends on the interaction of two factors: (i) the correlation in task-level skills across workers, and (ii) workers’ skills relative to the technology’s effective skill. In many cases we study, the inequality effect is non-monotonic — as technologies improve, inequality decreases then increases. The model and descriptive statistics of skill correlations generally suggest that the diversity of automation technologies will play an important role in the evolution of inequality.
Artificial intelligence and cognitive inequality
Indira Puri & Laura Veldkamp
Journal of Monetary Economics, January 2026
Abstract:
We combine insights from the medical and artificial intelligence (AI) literatures to propose a novel model, which suggests that the expansion of AI may exacerbate cognitive inequality. Information providers maximize profit by tailoring the complexity of content, offering less cognition-enhancing content to less able customers. While individuals with high cognitive abilities may benefit from this increased within-cognitive-group homogeneity, those with lower cognitive abilities — and even children — may suffer adverse effects. Anecdotal data from political discourse and cognitive skills scores are consistent with the model predictions. The findings introduce a new consideration to the debate on financial literacy and AI regulation.
Education-related resource hoarding in the face of downward socioeconomic mobility
Ivan Hernandez, David Silverman & Mesmin Destin
Social Psychology of Education, November 2025
Abstract:
Do concerns about descending the socioeconomic hierarchy contribute to socioeconomic status (SES)-based intergroup processes that reinforce inequity in higher education? Across three studies (N = 1,690), we examined how concerns about downward socioeconomic mobility caused certain students to engage in education-related resource hoarding. Results indicate that presenting higher-SES students with information about the potential for downward socioeconomic mobility reduced their support for a school policy benefiting lower-SES students (Study 1). Exploratory findings suggest that students from affluent backgrounds (Study 2) and students led to believe they were high SES (Study 3) were more likely to believe that it was appropriate for them to prioritize their own educational and economic needs, even at the expense of other students, when they were led to feel concerned about the possibility of losing their position on the socioeconomic hierarchy. The role that education-related resource hoarding plays in contributing to extant societal inequality is discussed.
Compounds and Raiders: A Strategic Model of Self-Protection in the End Times
Laurent Gauthier
Risk Analysis, January 2026
Abstract:
This paper examines the rationality of elite bunker building as a response to anticipated societal collapse. Indeed, the phenomenon of “prepping” for “the Event” can be framed as self-insurance and relies on a transactional view of humanity, if one is to ensure the control of a compound and fight off potential assailants. We draw on economic decision modeling to analyze how the necessity of internal control by the leader, resentment, or the perception of potential loot by outsiders interact with fortification strategies. We introduce a “Machiavelli index” to represent hostility and show that excessive investment in defense can be counterproductive and provoke attack. Maximum bunkerization may not be optimal compared to a degree of cooperation, redistribution, and efforts to reduce perceived inequality. Survival in the end times may depend less on walls and more on legitimacy, reciprocity, and strategic restraint.
Marriage and the Intergenerational Mobility of Women: Evidence from Marriage Certificates 1850-1920
Katherine Eriksson et al.
NBER Working Paper, February 2026
Abstract:
We document that women’s economic mobility improved nearly a century before married women gained broad labor market opportunities. Using Massachusetts marriage registers linked to U.S. censuses (1850–1920), we create new father–child links for women to estimate intergenerational mobility and assortative mating, overcoming a key historical linkage barrier. Estimates from a structural marriage market model suggest assortative mating fell 61% from 1850–1870 to 1900–1920. Counterfactuals imply women’s mobility would have been far lower absent the decline in assortative mating. Had late cohorts faced early cohort sorting, the rank–rank slope between a woman’s father and husband would have been 2.5 times higher.
The 2008 Great Recession Lowered Americans’ Class Identity
Stephen Antonoplis et al.
Psychological Science, January 2026, Pages 18-29
Abstract:
Americans readily identify with class labels, such as working class and middle class. In turn, these identities affect their social affiliations, cultural values, and physical health. Despite theoretical predictions that class identity can change, little work has empirically examined the long-term malleability of class identity. Here we ask, can class identity change in the long term? And if so, when? We tested this question by examining whether the 2008 Great Recession changed how Americans viewed their social and economic standing in society -- that is, their class identity. In three of four data sets (total N = 164,296), we found that the 2008 Great Recession shifted Americans toward identifying as a lower class. We discuss the implications of these results for theories of the formation of class identity and for the political and social development of the United States following 2008.