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Dec 16, 2016 09:59 AM EST

The American Dream in the Age of Inequality [Video]


Living the "American dream" is an aspiration of every American parent for his or her child. It's also the same dream that drew in migrants and opportunity seekers believing that the land of the free is the new promised land. However, the dream remained unquantified for a long time and when its value was finally known, it showed us what we already knew but often dismissed.

The phrase was invented during the Great Depression, said the New York Times. James Truslow Adams used the phrase "American dream" in his 1931 book and it meant "that dream of a land in which life should be better and richer and fuller for everyone."

The years after the Depression showed rapid economic growth and development that made it easier for children to earn more than their parents did. It was one clear indicator of raising one's living standards.

That however is quite questionable today. It today's workforce earning more than their parents did? More importantly, are they enjoying a higher standard of living?

To find out the answers, economists led by Raj Chetty went out to quantify the American dream. It was a tricky and work-intensive task but they were able to create an index of the American dream using questionnaires and classified tax information.

What the researchers found is that children born in the 1940s are generally earning better than their parents and while there some who made less, most of these were already born rich so it was quite hard to top their parents' earnings but they were doing fine.

According to The Atlantic, the paper highlights one more thing. It shows why it's harder for each generation to achieve the American dream because of: 1) the slow expansion of the Gross Domestic Product (GDP); and 2) unequal distribution of GDP's growth, and its concentrated at the top.

It affirms that those at the top are getting more and those at the bottom get less. It's quite ironic that the country that prides itself with social mobility, where anybody can start from nothing and succeed when its people have been struggling to achieve the American dream that it's very system has made nearly impossible to reach.

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