This piece dismantles a comforting myth that has shaped American economic policy for decades: the idea that our society is a true meritocracy where family wealth fades within three generations. Brad DeLong resurrects a pivotal 2002 analysis by Samuel Bowles and Herbert Gintis to reveal that the "land of equal opportunity" narrative is largely a statistical illusion caused by measurement errors. For busy leaders trying to understand why wealth gaps persist despite decades of "upward mobility" rhetoric, this is not just academic history; it is the missing data point explaining why current policies often fail to move the needle.
The Illusion of Mobility
DeLong begins by contextualizing the work within the legacy of economist Alan Krueger, noting that the Journal of Economic Perspectives once served as a vital platform for such corrective insights. He highlights a stark reversal in the economic consensus. "The old consensus said a father's economic advantage all but vanished in three generations," DeLong writes, but this belief was a "measurement error-caused statistical illusion." The reality, as DeLong paraphrases from Bowles and Gintis, is that the true intergenerational persistence of income is roughly three times higher than previously thought.
The author dissects the specific numbers that changed the conversation. Where earlier studies claimed a father-son income correlation of just 0.15, DeLong points to the corrected figure of 0.4. He notes that for consumption, the elasticity is 0.7, and for wealth, it is 0.5. "Becker and Tomes' (1986) claim that the father-son income correlation was 0.15 is simply wrong," DeLong states bluntly. This correction matters because it shifts the baseline assumption of the entire economic debate. If mobility is this low, then policies designed for a high-mobility society are fundamentally misaligned with reality.
Critics might argue that focusing on aggregate correlations obscures individual stories of success, but DeLong's framing suggests that systemic barriers are far more pervasive than anecdotal evidence allows. The data implies that the "American Dream" is statistically rare, not the norm.
The Black Box of Inheritance
The most provocative element of the analysis, as DeLong presents it, is the debunking of the "smart genes" argument. Many assume that the rich are rich because they are genetically superior, and thus their status is deserved. DeLong writes, "The belief is false that 'smarts' and the genetic transmission thereof, at least as measured by IQ, is key to the intergenerational transmission of income inequality." This directly challenges the notion that inequality is a natural outcome of merit.
Instead, the transmission happens through a "black box" that standard human capital models fail to fully explain. DeLong explains that while smart parents have smart kids, and smart kids get good jobs, this pathway accounts for only about three-fifths of the transmission. The rest is driven by factors often ignored in standard economic models: parental wealth, race, and "noncognitive personality traits." "It is parental wealth, race, and 'noncognitive personality traits' that do most of the work here," DeLong emphasizes.
This distinction is crucial for policymakers. If the driver were purely IQ, the solution might be better testing or education. But because the drivers are wealth, race, and behavioral traits shaped by the family environment, the solutions require structural intervention. DeLong notes that the genetic transmission of IQ is "even less important" than the transmission of IQ itself, which is a surprising and counter-intuitive finding that undermines the biological determinism often used to justify the status quo.
The results are somewhat surprising: wealth, race and schooling are important to the inheritance of economic status, but IQ is not a major contributor, and, as we have seen above, the genetic transmission of IQ is even less important.
DeLong connects this to the broader debate on redistribution, citing survey data showing that public support for social programs hinges entirely on why people think the rich are rich. If the public believes success comes from "hard work," they oppose redistribution. But if they believe it comes from "money inherited from family" or "connections," they support it. The persistence of inequality, therefore, is not just an economic issue but a crisis of belief. This echoes findings in family economics research, where the interplay of cultural capital and social networks often outweighs raw cognitive ability in determining life outcomes.
The Policy Imperative
The analysis concludes by addressing the role of government. DeLong argues that the goal shouldn't be to eliminate all correlation between parent and child income, which would violate family privacy. Instead, the focus must be on the mechanisms that are "clearly unfair." "The role of race in transmitting status from generation to generation is clearly unfair," DeLong writes, identifying it as a primary target for policy intervention.
He suggests that the "black box" contains variables we are missing entirely, such as geography, health status, and physical appearance, which are not typically treated as factors of production but are critical to income generation. "The fundamental problem is not that we are measuring the right variables poorly, but that we are missing some of the important variables entirely," he observes. This reframing forces a shift from asking "how do we make people smarter?" to "how do we dismantle the structural advantages that allow wealth and race to dictate destiny?"
A counterargument worth considering is that some level of intergenerational transmission is inevitable and perhaps even desirable for family stability. However, DeLong's evidence suggests that the current level of transmission is not a natural equilibrium but a result of specific, addressable policy failures regarding race and wealth concentration.
Bottom Line
DeLong's commentary on Bowles and Gintis delivers a necessary corrective to the myth of American meritocracy, proving that the persistence of inequality is driven by wealth, race, and noncognitive traits rather than genetic intelligence. The argument's greatest strength is its ability to dismantle the biological justification for inequality, while its vulnerability lies in the difficulty of designing policies that address "noncognitive traits" without infringing on family autonomy. The takeaway is clear: until we stop treating the inheritance of status as a natural law and start treating it as a policy failure, the playing field will remain anything but level.