The dynamics of the 'Great Gatsby Curve' and a look at the curve during the Great Gatsby era

We use linked historical US censuses to study the empirical relationship between inequality and intergenerational mobility. We first confirm that the 'Great Gatsby Curve' already existed in the early 20th century. We then study a 'dynamic' version of the curve that relates changes in equality to changes in intergenerational mobility. Interestingly, we find that this relationship varies over two-decade periods for income but remains consistent for education. Finally, we propose novel unitless measures of intergenerational mobility and inequality to show that the 'Great Gatsby Curve' result re-emerges over the long run, for the period 1920 to 2011.