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What underlies the Great Gatsby Curve? Psychological micro-foundations of the “vicious circle” of poverty

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Abstract

Societies with a higher level of income inequality tend to have lower levels of intergenerational income mobility. Known as the Great Gatsby Curve, this negative relationship in part derives from greater intergenerational economic heritance among the poor. Societies with higher rates of relative poverty will have a higher level of income inequality, but they will also tend to have lower intergenerational mobility due to the reduced capacity of low-income persons to become upwardly mobile. Reviewing relevant research in psychology, we describe how poverty is associated with decreased psychological resources that compromise the competitiveness of low-income persons for superior attainment in the educational system and for greater productivity in the labor market. Economic deprivation in itself thus leads to a “vicious circle” of disadvantage that diminishes intergenerational mobility even without the existence of any culture of poverty or monopolistic institutions in the economy.

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Acknowledgments

We thank the Editor and two anonymous reviewers for helpful comments on an earlier draft of this paper.

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Authors and Affiliations

  1. Department of Sociology, Texas A&M University, 4351 TAMU, College Station, TX, 77843-4351, USA

    Arthur Sakamoto & Sharron X. Wang

  2. Department of Applied Psychology, New York University, 246 Greene Street, 8th Floor, New York, NY, 10003, USA

    Jason Rarick

  3. Department of Sociology, Portland State University, Post Office Box 751, Portland, OR, 97207-0751, USA

    Hyeyoung Woo

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  1. Arthur Sakamoto
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Correspondence to Arthur Sakamoto.

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Sakamoto, A., Rarick, J., Woo, H. et al. What underlies the Great Gatsby Curve? Psychological micro-foundations of the “vicious circle” of poverty. Mind Soc 13, 195–211 (2014). https://doi.org/10.1007/s11299-014-0144-x

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