Miles Corak is a professor of economics at the University of Ottawa. He has published numerous articles on topics dealing with child poverty, access to university education, intergenerational earnings and education mobility, and unemployment. He has also contributed to two RSF volumes on economic mobility—From Parents to Children (2012) and Persistence, Privilege and Parenting (2011).
Q: In your chapter in Persistence, Privilege, and Parenting, you compare the effects of family background on mobility outcomes in Canada and the United States. First, why should people interested in inequality and mobility look in particular at the different results in these two countries? And second: is the ‘American Dream’ more achievable in Canada?
A: Perhaps the best way to answer this question is to consider what we mean by this phrase.
The "American Dream" is a very important metaphor in the United States, indeed some would say a defining metaphor. But it has a host of meanings, and our analysis speaks to the idea that economic outcomes should be the result of the energies, talents and motivations of individuals than of their family background. The American Dream is about becoming all that you can be regardless of your starting point in life.
In fact, we used similarly designed public opinion polls in the two countries to ask representative samples of Americans and Canadians what they understood the American Dream to mean, and surprisingly they answered in very much the same way, indeed in some scenarios we put to them, exactly in the same way. Both Americans and Canadians value freedom, being able to accomplish anything that you want, and to have the basic opportunities like health and education to do so.
On average, it is pretty clear that there is more mobility, up to three times more mobility, in Canada than in the United States.
Canadians differ from Americans in that they have a stronger tendency to see government policy as just another tool to help them achieve their individual goals. I don't want to overstate this tendency, but it is clear that Americans have a stronger tendency to see government as hindering rather than helping them, and that this could reflect a belief about the effectiveness of public policy as much as a principled stand against it.
There is value in comparing these two countries precisely because Americans and Canadians share some important values and goals, and because labour markets function in broadly similar ways on both sides of the border. But also because attitudes to public policy and the actual design of policy differ. These are differences that we potentially can all learn from, and that might be transferable across the countries.
To the extent that we measure the American Dream by the degree of relative earnings mobility across the generations --- by how closely tied a child's adult position in the earnings distribution is to the position occupied by his or her parents --- then on average it is pretty clear that there is more mobility, up to three times more mobility, in Canada than in the United States.
But the major point of our chapter was that this difference reflects differences in mobility at the two extremes of the earnings distribution. In fact, the broad majority of Canadians and Americans born to parents in the broad middle of the earnings distribution experience considerable mobility both upward and downward. But Americans born to parents at the top and the bottom are more likely than Canadians to become, respectively, the top and bottom earners of the next generation. It is in this sense that some might suggest that the American Dream is more of a reality north of the 49th parallel.
