A Broken Social Elevator? - How to Promote Social Mobility - Céline THEVENOT, OECD Jobs and Incomes Division - UN.org
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A Broken Social Elevator? How to Promote Social Mobility Céline THEVENOT, OECD Jobs and Incomes Division
Large country differences in
levels of income inequality
OECD countries Emerging economies
0.5 0.7
Gini Coefficient of income
inequality
0.6
0.45
More inequality
0.5
0.4
0.4
0.35
0.3
0.3
0.2
0.25
0.1
0.2 0
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.
Income inequality has been
rising
Trends in real household incomes
1985 = 1 OECD-17
1.8
Top 10%
1.6
Mean
1.4
Median
Bottom 10%
1.2
1
0.8
1980 1985 1990 1995 2000 2005 2010 2015
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.
Consequences of inequality
ethical social
political economic
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
Average years of schooling Average numeracy score
by parental educational background (PEB) and by parental educational background (PEB) and
inequality inequality
Low PEB Medium PEB High PEB Low PEB Medium PEB High PEB
14 300
290
Years of schooling
Numeracy Score
13 280
270
12 260
250
11 240
20OECD (2015),
Source: 25 30 35 20 25 30 35
“In It Together” Inequality (Gini coefficient) Inequality (Gini coefficient)
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
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.
Sticky floors and sticky
ceilings in education
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
Neither parent has attained
43 45 10 2
upper secondary
At least one parent
7 31 41 22
has attained tertiary
% 0 10 20 30 40 50 60 70 80 90 100
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
60 %
Father in the top earnings quartile
50
40
30
20
10
Father in the bottom earnings quartile
0
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
12 12
10 10
8 8
6 6
4 4
2 2
0 0
More inequality does not
mean more social mobility
Earnings mobility across generations today
0.9
DNK
NOR
FIN
0.8 OECD24
SWE NZL ESP
GRC
0.7 CAN
AUS
BEL JPN
NLD PRT
0.6 KOR
IRL USA
ITA
GBR
AUT CHE
More mobility
0.5 ARG
FRA CHL
DEU CHN IND
0.4
HUN
BRA
ZAF
0.3
COL
0.2
0.1 0.2 0.3 0.4 0.5 0.6 0.7
Inequality 25 years ago (Gini coefficient)
More inequality 10Mobility patterns across generations,
by country and dimension
United States Germany
Minimum Maximum
Minimum Maximum Iceland OECD Mex ico
Iceland OECD Mex ico Income inequality
Income inequality Germany
United States Hungary OECD Denmark
Hungary OECD Denmark Earnings mobility
Earnings mobility Germany
United States Portugal OECD Korea
Portugal OECD Korea Education mobility
Education mobility Germany
United States Korea OECD Iceland
Korea OECD Iceland
Occupation mobillity
Occupation mobillity Germany
United States
Italy
Sweden
Minimum Maximum
Iceland OECD Mex ico
Income inequality
Sweden
Hungary OECD Denmark
Earnings mobility
Sweden
Portugal OECD Korea
Education mobility
Sweden
Korea OECD Iceland
Occupation mobillity
SwedenMany people perceive social
mobility to be low
Share of people who believe it is (not) important
to have well-educated parents to get ahead in life
Important Not important
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
Source: OECD calculations based on the International Social Survey Program (ISSP)Perceptions about mobility
tend to square with reality
Perceived and actual persistence of earnings
over one generation
Perceived persistence
80
ZAF
70
60 CHL
ESP
USA DEU
50
AUS KOR
40 BEL PRT FRA HUN
ITA AUT
30 OECD CHE
GBR
DNK SWE JPN
20 NOR
FIN
10
0
0 10 20 30 40 50 60 70 80
Earnings persistence
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”Mobility over the life course
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
%
100
90
80 43 Move one quintile or more up
70
68
60
50
Stay in the same quintile
40
30 57 32
20
Move one quintile or more down
10
0
Poorest 2 3 4 Richest1 in 7 middle class individual
likely to fall down within 4 years
Risk for middle income households to slide down to the
bottom, 4 years, 2010-2014 or closest
OCDE34
Grèce
Islande
Chili
Espagne
Autriche
Royaume-Uni
Australie
Belgique
Hongrie
Portugal
Pologne
Slovénie
France
Italie
Irlande
États-Unis
République tchèque
Suisse
Turquie
Danemark
Finlande
Allemagne
Norvège
Estonie
Suède
Lettonie
Pays-Bas
Corée
République slovaque
Luxembourg
0 2 4 6 8 10 12 14 16 18 20Consequences of downward
mobility over the life course
People with a deteriorating economic situation over the past 5 years
are less likely to feel that their voice counts at country level
Economic situation improved (↗) Economic situation got worse Economic situation stayed about the same
%
100
90
80
70
60
50
40
30
20
10
0
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
Share of people with large income losses
Loss of 20% or more of market income (↘) Loss of 20% or more of disposable income
35
30
25
20
15
10
5
0Public policies can make
societies more mobile
Countries that in the past spent Countries that devoted more
more on public education tend to resources to health tend to have
have higher educational mobility higher health mobility
Intergeneration
al educational Health status
mobility mobility
0.8 1
SWE CAN
0.7 NOR FIN DNK
DNK 0.9
FRAUSA GRC
HUN BEL NLD SWE
IRL
0.6 OECD15 ESP ITA FRA
PRT OECD26
BEL SVN AUT
0.8
SVK ESP GBR HUN POL
0.5 CZE AUS DEU
CZE
GBR USA
ISR IRL
0.7 KOR
0.4 DEU LUX
EST
PRT
0.3
0.6
3 3.5 4 4.5 5 5.5 6 6.5 7 7.5
Public expenditure on education as a percentage of the GDP 0 20 40 60 80 100
in 1995 Health resources 2005Policies can make our
societies more mobile
What the OECD offersThank you for your attention
Contact
celine.thevenot@oecd.org
http://oe.cd/social-mobility-2018
@OECD_Social
http://oe.cd/copeMen and women have
different prospects for social
mobility
• 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.You can also read
