Rasmus Landersø, James J. Heckman

This paper examines the sources of differences in social mobility between the U.S. and Denmark. Measured by income mobility, Denmark is a more mobile society, but not when measured by educational mobility. There are pronounced nonlinearities in income and educational mobility in both countries. Greater Danish income mobility is largely a consequence of redistributional tax, transfer, and wage compression policies. While Danish social policies for children produce more favorable cognitive test scores for disadvantaged children, these do not translate into more favorable educational outcomes, partly because of disincentives to acquire education arising from the redistributional policies that increase income mobility.

JEL Codes  
I24: Education and Inequality
I28: Education: Government Policy
I32: Measurement and Analysis of Poverty
P51: Comparative Analysis of Economic Systems
social mobility
comparative analysis of systems