Data Reveals the American Dream Is Alive and Well—in Canada

So the American dream is a complicated concept

that means different things to different people.

But let's distill it to a simple statistic

that we can measure systematically in the data,

which is the probability that a child born to parents

in the bottom fifth of the income distribution,

makes the leap all the way to the top fifth

of the income distribution.

So the classic ratio algro version

of the American dream.

How common is that in the United States

versus a few other developed countries around the world

where we have comparable data?

In the U.S., as you see here,

children born to parents in the bottom fifth,

have a 7.5% chance of reaching the top fifth.

That compares with 9% in the United Kingdom,

11.7% in Denmark and 13.5% in Canada.

Now sometimes when people look at these statistics,

they react by saying, oh even in Canada,

it doesn't look like your odds of success

are all that high,

only a 13.5% chance of succeeding.

But you have to remember, of course,

that no matter what you do,

you can't have more than 20% of people

in the top 20% and so

the maximum value that the statistic can take

if we had a society where our parents

played no role at all in determining our outcomes,

would be a 20% value.

And so relative to that max,

these are actually quite large differences

in rates of upward mobility.

One way you might summarize these data,

is that your chances of achieving the American dream

of climbing the income ladder,

look almost twice as high in Canada

than in the United States.