Going up?

OECD Observer

“All human beings are born equal. But on the following day, they no longer are,” said French author Jean Renard in 1907. This is because sticky floors and ceilings–or rags to rags and riches to riches–define the bottom and top income distributions. Today, it takes four to five generations, on average, for children from the poorest 10% of the population to reach median income levels. Meanwhile, about 50% of children of wealthy parents will themselves remain rich in countries like Germany and the US.

Worse, every four years, a fifth of the middle class’ poorest fall down to the bottom of the income distribution while its upper half enjoys much greater security, as shown in A Broken Social Elevator? How to Promote Social Mobility.

What’s more, in countries like Brazil and South Africa where income inequality is high, there is a state of “permanent inequality”, with an underlying feeling that social mobility is but a broken promise. Indeed, low upward mobility increases people’s sense that their voices do not matter and that the system is neither fair nor meritocratic.

Still, mobility is not all about money. It can range from jobs to education and health, and it changes when viewed through each of these lenses. These distortions create unique situations within each country: in places like Japan and Korea, educational mobility is higher than income mobility, but it’s the other way around in Norway and Spain. In the US, job mobility is higher than earnings mobility, while in Finland it’s the reverse, with lower educational mobility on top.

Yet there is nothing inevitable about socio-economic status being passed down between generations. Equal access to quality education is one way to enhance social mobility: countries that spend more on public education tend to achieve higher educational mobility. The same goes for health. Moreover, progressive taxation on wealth, inheritance and combatting tax avoidance leads to less sticky ceilings, while money transfers or benefits to low-income families and improving the school-to-work transition unsticks the floors. And as the report shows, policies that address the likes of residential segregation and sudden unemployment, or aim to improve the work-home balance can enhance social mobility across the board.

Reference

OECD (2018), A Broken Social Elevator? How to Promote Social Mobility, OECD Publishing, Paris, https://doi.org/10.1787/9789264301085-en

©OECD Observer No 314, Q2 2018




Economic data

GDP growth: +0.6% Q2 2018 year-on-year
Consumer price inflation: 2.9% Aug 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.3% Aug 2018
Last update: 10 Oct 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018