Action needed to tackle stalled social mobility

oecd logo 2018

Copyright: OECD

This article is brought to you in association with OECD.

As income inequality has increased since the 1990s, social mobility has stalled, meaning that fewer people at the bottom have moved up while the richest have largely kept their fortunes. This has severe social, economic and political consequences, according to a new OECD report.

A Broken Social Elevator? How to Promote Social Mobility says that given current levels of inequality and intergenerational earnings mobility, it could take at least five generations or 150 years for the child of a poor family to reach the average income, on average across OECD countries.

This ranges from just two to three generations in the Nordic countries to nine generations or more in some emerging economies. One in three children with a low earning father will also have low earnings, while for most of the other two-thirds upward mobility is limited to the neighbouring earnings group.

“Too many people feel they are being left behind and their children have too few chances to get ahead,” said Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20, who also oversees the OECD’s Inclusive Growth Initiative. “We need to ensure that everyone has the opportunity to succeed, especially the most disadvantaged, and that growth becomes truly inclusive.”

Across generations, earnings mobility prospects tend to be weaker in countries where income inequality is high, and stronger in countries where inequality is low. The Nordic countries combine low inequality with high mobility whereas Latin American countries and some emerging economies have high inequality but low mobility.

Income mobility was a reality for many people born between 1955 and 1975 from low-educated parents but it has stagnated for those born after 1975.

Over the four year period observed in this report, about 60% of people remained stuck in the lowest 20% income bracket, while 70% remained at the top. At the same time, one-in-seven of all middle class households, and one-in-five of people living closer to lower incomes, fell into the bottom 20%.

Countries need to put in place policies that give everyone the chance to succeed, says the OECD. Increased investment in education, particularly at an early age, health and family policies would create a more level playing field for disadvantaged children and mitigate the impact of financial hardship on their future.

Access to good quality, affordable housing, as well as transport, and improved urban planning also help reduce regional divides and concentrations of disadvantaged households in cities. Reducing inheritance and gifts tax avoidance, and designing progressive tax systems with adequate rates and reduced exemptions would enhance social mobility. Strengthening safety nets and training schemes, as well as tying social protection entitlements to individuals, not jobs, would help people, especially low earners, cope with losing their job.

The report is part of the OECD’s broader Inclusive Growth Initiative, that has just released its Framework for Policy Action, with a dashboard of indicators and policy tools to address inequalities.

The OECD has also launched an updated version of the interactive web-tool, Compare your income, which can be easily embedded in webpages. It includes new questions on economic mobility across generations, and is available in eleven languages. The tool is built using the most recent data from the OECD Income Distribution Database.

The report, as well as country notes for Australia, Brazil, Canada, Chile, France, Germany, Italy, Japan, Korea, Mexico, Portugal, Spain, Sweden, the United Kingdom and the United States, can be downloaded at http://www.oecd.org/social/broken-elevator-how-to-promote-social-mobility-9789264301085-en.htm

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Do men and women really have different leadership styles?

Here’s how data could make our cities safer

EU leaders agree on 2030 Climate and Energy Package: is “flexible” brave enough?

Has the EU economy truly revived from the financial crisis?

South Africa still hasn’t won LGBTQ+ equality. Here are 5 reasons why

The Europeans with a job diminish dangerously

Reintegrating former rebels into civilian life a ‘serious concern’ in Colombia: UN Mission chief

Eurozone: Subdued inflation can lead to more recession

Civil society groups matter for Cambodia’s sustainable development: UN expert

Impact of high debt levels on least developed countries ‘cannot be overstated’, says UN

“C’est la vie”? French recession and unemployment to linger in Eurozone

MEPs want to fund crucial areas to stimulate European growth

The EU-US trade agreement, victim of right-wing extremists and security lunatics

We need to talk about how we define responsibility online – and how we enforce it

UN says ‘many humanitarian achievements’, one year after ouster of ISIL from Mosul

From drones to health data, how Japan can power ahead

The G7 should take the lead on ocean targets for 2020

Trade war or not New York bankers will have it their way

Eliminating waste at scale – eight opportunities for blockchain

Greece: Tsipras’ referendum victory does not solve the financial stalemate of the country and its banks

EU Leaders’ meeting in Sofia: Completing a trusted Digital Single Market for the benefit of all

230 Junior Entrepreneurs and over 70 guests attended the International Congress on “Entrepreneurial Skills for Youth”

Resolving banks with depositors’ money?

Dozens killed and injured by new airstrikes in western Yemen, UN coordinator condemns ‘outrageous’ toll

Time to say goodbye to the plastic straw. But what’s the best alternative?

Preparing the future today: World Health Organisation and young doctors

Brussels waits for the Germans to arrive

Ten UN peacekeepers killed in a terrorist attack in northern Mali

German egotistic inward turn to badly hurt Europe after Merkel’s exit

2018 ‘terrifying’ for Yemenis but ultimately a ‘year for hope’ says UN Special Envoy

What Mary Poppins teaches us about behavioural economics

This is why mountains matter more than you think

Further reforms will promote a more inclusive and resilient Indonesian economy

Gaza investigators call on Israel to review ‘rules of engagement’ as Gaza protest anniversary looms

Young people meet in Malta to shape the future of Europe

ECB tied in the anti-monetary German ideology

UN experts warn Assange arrest exposes him to risk of serious human rights violations

The good news on pensions: sustainable equals profitable

At last some rules on banks

The refugee crisis seen through the eyes of a young doctor from Turkey

Campaign kicks off with High-level Event on #FairInternships

Is the English language too powerful?

US, Russia oblige each other in Syria and Ukraine selling off allies

The Italian ‘no’ and France’s Fillon to reshape Europe; Paris moves closer to Berlin

Appalling overall unemployment in Eurozone at 20.6%

United States: UN human rights office welcomes California moratorium on death penalty

UN chemical weapons watchdog adds new powers to assign blame, following attacks

CLIMATE CHANGE FOCUS: Cutting emissions, one bog at a time

UN envoy ‘encouraged’ by latest talks on avoiding ‘worst-case scenario’ in Syria’s Idlib

Conflicting statistics and bad banks haunt the Eurozone

Batteries can power sustainable development. Here’s how

EU and China to do more in common if the global scene gets worse

A day that Berlin and Brussels would remember for a long time

Every year, South Korea comes to a standstill for an exam marathon

Roxane in Cambodia

Estonia is making public transport free

Questions and Answers on issues about the digital copyright directive

Light at the end of the Eurozone tunnel

This is how people in Europe are helping lead the energy charge

MEP Cristiana Muscardini @ European Business Summit 2014: International Trade in Europe

More Stings?

Trackbacks

  1. […] View Original: Action needed to tackle stalled social mobility […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s