DP1496 | More Equal but Less Mobile? Education Financing and Intergenerational Mobility in Italy and in the United States

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A state school system should be expected to reduce income inequality and to make intergenerational mobility easier. It is therefore somewhat surprising to observe that Italy, in comparison to the United States, displays less inequality between occupational incomes, but lower intergenerational upward mobility, not only between occupations, but also between education levels. In this paper we provide evidence on this empirical puzzle, and offer a theoretical explanation building around the idea that even if in Italy moving up on the social ladder is easier, the incentive to move may be lower, making mobility less likely.