How to Promote Social Mobility
A Broken Social Elevator?
Céline THEVENOT, OECDJobs and Incomes Division
Source: OECD Income Distribution Database (www.oecd.org/social/income-distribution-database.htm)Note: the Gini coefficient ranges from 0 (perfect equality) to 1 (perfect inequality). Income refers to cash disposable income adjusted for household size. Data refer to 2015 or latest year available.
Large country differences in
levels of income inequality
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Emerging economies
0.2
0.25
0.3
0.35
0.4
0.45
0.5Gini Coefficient of income inequality
OECD countries
Mo
re i
ne
qu
ali
ty
Income inequality has been
rising
Source: OECD Income Distribution Database, www.oecd.org/social/income-distribution-database.htm. Note: Income refers to real household disposable income. OECD-17 refers to the unweighted average of the 17 OECD countries for which data are available: Canada, Denmark, Finland, France, Germany, Greece, Israel, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Sweden, the United Kingdom and the United States. Some data points have been interpolated or use the value from the closest available year.
Trends in real household incomes1985 = 1 OECD-17
0.8
1
1.2
1.4
1.6
1.8
1980 1985 1990 1995 2000 2005 2010 2015
Top 10%
Mean
Median
Bottom 10%
Consequences of inequality
ethical social
economicpolitical
Inequality and growth : links
over three decades
1. Higher income inequality lowers subsequent economic growth in the long-term
� Increasing income inequality by 1 Gini point lowers the growth rate of GDP per capita by ~0.12 %-points per year
2. This is driven by disparities at the lower end of the distribution, incl. lower middle classes, not just the poor
3. Redistribution through taxes and transfers does not
necessarily lead to bad growth outcomes
Higher inequality hinders skills
investment by the lower middle class and
lowers social mobility
Note: Low PEB: neither parent has attained upper secondary education; Medium PEB: at least one parent has attained secondary and post-secondary, non-tertiary education; High PEB: at least one parent has attained tertiary education. The bars indicate 95% confidence intervals.
Average years of schooling
by parental educational background (PEB) and
inequality
11
12
13
14
20 25 30 35
Ye
ars
of
sch
oo
lin
g
Inequality (Gini coefficient)
Low PEB Medium PEB High PEB
Increasing inequality by ~5-6 Gini pts. (the current differential between Denmark and
Germany) means less average schooling of low PEB individuals by ~half a year
Source: OECD (2015), “In It Together”
Average numeracy score
by parental educational background (PEB) and
inequality
240
250
260
270
280
290
300
20 25 30 35
Nu
me
racy
Sco
re
Inequality (Gini coefficient)
Low PEB Medium PEB High PEB
Sticky floors and sticky
ceilings in education
7
43
31
45
41
10
22
2
0 10 20 30 40 50 60 70 80 90 100
At least one parent has attained tertiary
Neither parent has attained upper secondary
%
Likelihood of educational attainment by parental
education background, OECD average
Lower secondary or less Upper secondary & post-secondary, non-tertiary
Tertiary - bachelor and professional degree Tertiary - Master/Research degree
0
10
20
30
40
50
60%
Father in the bottom earnings quartile
Father in the top earnings quartile
Sticky floors at the bottom,
sticky ceilings at the top
Children from disadvantaged families struggle to move up the ladder
Share of people in the top earnings quartile, by father’s earnings position
It would take 5 generations for the
descendants of a low-income
family to reach the average income
Number of generations it would take for descendants of families in the bottom 10% to reach the mean income in society
0
2
4
6
8
10
12
0
2
4
6
8
10
12
10
More inequality does not
mean more social mobility
OECD24
DNK
NOR
FIN
SWE ESPNZL
GRC
CAN
BEL
AUS
JPN
PRTNLDIRL
KOR USAITA
GBRCHEAUT
FRA CHL
DEU
HUN
ARG
INDCHN
BRAZAF
COL
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0.1 0.2 0.3 0.4 0.5 0.6 0.7
Earnings mobility across generations today
Inequality 25 years ago (Gini coefficient)
Mo
re m
ob
ilit
y
More inequality
Mobility patterns across generations,
by country and dimension
United States Germany
Sweden
DenmarkHungary OECD
United States
Earnings mobility
Occupation mobillityIcelandKorea OECD
United States
Education mobilityKoreaPortugal OECD
United States
Minimum Maximum
Iceland Mex icoOECD
United States
Income inequality
DenmarkHungary OECD
Sweden
Earnings mobility
Occupation mobillityIcelandKorea OECD
Sweden
Education mobilityKoreaPortugal OECD
Sweden
Minimum Maximum
Iceland Mex icoOECD
Sweden
Income inequality
DenmarkHungary OECD
Germany
Earnings mobility
Occupation mobillityIcelandKorea OECD
Germany
Education mobilityKoreaPortugal OECD
Germany
Minimum Maximum
Iceland Mex icoOECD
Germany
Income inequality
Italy
Many people perceive social
mobility to be low
Source: OECD calculations based on the International Social Survey Program (ISSP)
Share of people who believe it is (not) important to have well-educated parents to get ahead in life
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
Important Not important
Perceptions about mobility
tend to square with reality
Note: Perceived persistence corresponds to the share of people who believe that it is important to have well-educated parents to get ahead. Earnings persistence corresponds to the elastisticy of earnings between fathers and sons. The higher the elasticity, the lower is intergenerational mobility. Perception data refer to 2009. Earnings persistence data refer to earnings of sons in the early 2010s with regard to fathers’ earnings. Source: OECD calculations based on the International Social Survey Program (ISSP) and Chapter 4 of “Broken Social Elevator”
Perceived and actual persistence of earnings over one generation
AUS
AUTBEL
CHE
CHL
DEU
DNK
ESP
FIN
FRA
GBR
HUNITA
JPN
KOR
NOR
PRT
SWE
USA
OECD
ZAF
0
10
20
30
40
50
60
70
80
0 10 20 30 40 50 60 70 80
Perceived persistence
Earnings persistence
Mobility over the life course
3257
68
43
0
10
20
30
40
50
60
70
80
90
100
Poorest 2 3 4 Richest
%
Move one quintile or more up
Stay in the same quintile
Move one quintile or more down
Mobility over the life course
Most people at the top and bottom do not change their position in the income distribution over a 4-year period
Share of individuals moving up, moving down, or staying in the same income
quintile, disposable income, 4 years, early 2010s or latest
Risk for middle income households to slide down to the bottom, 4 years, 2010-2014 or closest
1 in 7 middle class individual
likely to fall down within 4 years
0 2 4 6 8 10 12 14 16 18 20
LuxembourgRépublique slovaque
CoréePays-BasLettonie
SuèdeEstonie
NorvègeAllemagne
FinlandeDanemark
TurquieSuisse
République tchèqueÉtats-Unis
IrlandeItalie
FranceSlovéniePolognePortugalHongrie
BelgiqueAustralie
Royaume-UniAutricheEspagne
ChiliIslande
Grèce
OCDE34
Consequences of downward
mobility over the life course
0
10
20
30
40
50
60
70
80
90
100
%
Economic situation improved (↗) Economic situation got worse Economic situation stayed about the same
People with a deteriorating economic situation over the past 5 years are less likely to feel that their voice counts at country level
Note: Control variables include age, household composition, overall feeling about life, political interest index.
Source: OECD calculations based on Eurobarometer 86, Nov. 2014.
Large market income losses are smoothed
to a different extent
0
5
10
15
20
25
30
35
Share of people with large income losses
Loss of 20% or more of market income (↘) Loss of 20% or more of disposable income
Public policies can make
societies more mobile
Countries that in the past spent more on public education tend to have higher educational mobility
Countries that devoted more resources to health tend to have higher health mobility
SVN
DNK
CZE
BEL
AUT
SWE
LUX
HUN
DEUPOL
FRA
KORIRL
NLD
CAN
ITA
EST
PRT
AUS
GRC
ESP
ISRGBR USA
OECD26
0.6
0.7
0.8
0.9
1
0 20 40 60 80 100
Health status mobility
Health resources 2005
BEL
CZE
DNKFIN
FRA
DEU
HUN
IRL
NOR
PRT
SVK ESP
SWE
GBR
USA
OECD15
0.3
0.4
0.5
0.6
0.7
0.8
3 3.5 4 4.5 5 5.5 6 6.5 7 7.5Public expenditure on education as a percentage of the GDP
in 1995
Intergeneration
al educational
mobility
Policies can make our
societies more mobile
What the OECD offers
http://oe.cd/social-mobility-2018
@OECD_Social
http://oe.cd/cope
Thank you for your attention
• Mobility of educational attainments between mothers and daughters tends to be lower than the mobility between fathers and sons, in particular in southern Europe and the emerging economies.
• Occupational mobility is also lower for women than for men, meaning that parents influence their daughters’ social positions more than their sons’.
• At the same time, intergenerational earnings mobility for daughters tends to be more similar to that for sons, especially when considering incomes rather than individual earnings.
Men and women have different prospects for social mobility
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