Wednesday, April 19, 2006

Daddies' boys

More economic research from Robin Naylor at the University of Warwick on intergenerational social mobility. He finds that Western societies show a strong correlation between the earnings of a father and his son, implying low social mobility - and the effect is strongest in the supposedly classless US.

Despite the commonly-perceived view of the US as an 'open' society with ready opportunities for individuals to rise from poverty to affluence (from 'rags to riches'), the evidence shows that the opposite is true. On average, a son's earnings are more closely related to his father's earnings in the United States than in any of the other countries.
In the UK, the connection between sons' earnings and fathers' earnings is weaker than in the United States, but stronger than in the Nordic countries. There is substantial earnings 'persistence' across the generations in all countries.

So, discounting any (very faintly) possible genetic factors, all the blether about the 'land of opportunity' over there or the 'meritocracy' here is exactly that. Unsurprising, but nice to have the confirmation.

Another finding:
In all of the countries, intergenerational earnings persistence is most pronounced in the 'tails' of the distributions. In other words, the likelihood of a son having earnings similar to his father's is greater for those born into particularly poor or particularly affluent backgrounds.
What this implies is that in the long term, the middle classes between these two extremes will bifurcate between the very rich and the very poor, as social mobility out of the middle is greater than mobility out of the extremes. This then implies an increasingly polarised society, as can be seen to some extent in the US and UK. The long term prospects for stability (and thus for continued growth) are not bright.



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