Educational Equality: From “Paradise Lost” To “The Great Gatsby Curve”

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Source: https://www.cgdev.org/blog/great-gatsby-curve-younger-and-poorer-how-inequality-explains-learning-outcomes-around-world Note: Income inequality and the degree to which the test scores of children depend on their parents’ income; see text for explanationThis is the fourth installment of my series on deteriorating human capital in Japan. For previous installments, click here, here, and here.In rich countries, human capital is the fount of all improvements in per capita income. It is the source of better technology as well as the ability of company personnel to utilize it. It is so important that leading economists have reversed themselves on a key issue regarding growth. Decades ago, the consensus was that to get more equality, countries had to surrender some growth, and vice versa. Today, orthodoxy has come to recognize that income equality promotes growth. The linkage is that greater income equality promotes more improvement in the knowledge and skills of the young, regardless of family finances.The OECD has published myriad reports along this line, e.g., Why Less Inequality Benefits All and later, A Broken Social Elevator. In 2014, Trends in Income Inequality and its Impact on Economic Growth calculated that, had Japan not suffered increased inequality during 1990–2010, per capita income in 2010 would have been 4% higher than it actually was. For an economy growing less than 1% per year, that’s a big deal. With each passing year, the shortfall widens from what might have been.Of course, equality can also be produced in ways that hamstring it, but, on net, greater e…