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Why it's harder to earn more than your parents | The Economist
The EconomistSophie Pender, Mohsin Ismail, Kavika Smith, Christine, Novelette, Sally Grantham-McGregor, Dawn, Idrees Kahloun
- Social mobility is projected to become increasingly difficult throughout the 21st century, with a 9% probability cited for individuals in Britain to move from the bottom to the top of the income ladder, compared to rates in Canada and Denmark being approximately 50% higher.
- Absolute social mobility is expected to decline for subsequent generations, dropping from a 90% chance for the post-war generation to earn more than their parents to a 50% chance for those born in the 1980s.
- In the US, the share of taxable income held by the top 1% is projected to remain a significant driver of inequality, having more than doubled from 9% in 1975 to over 18% by 2018.
- The global economic shift from manufacturing to service-based industries is anticipated to reduce opportunities for those without university degrees, making education the primary determinant of income and potentially condemning non-degree holders to precarious financial situations.
- Declining social mobility is predicted to fuel political rifts and radicalism, serving as a powerful impulse for populist movements across both the left and the right in the US and globally.
- Persistent class-based assumptions regarding personal responsibility are expected to continue affecting working-class individuals, alongside observed early academic performance gaps where children from wealthier families outperform lower-income peers as early as primary school without intervention.
- Specific initiatives are expected to continue their work, including schools in Newham with 95% of past graduates attending top universities, the "Jamaica Programme" model showing 25% earnings gains after 20 years and 43% after 30 years, and the "93% Club" expanding its 50 UK branches to provide mentorship.
- Changes in higher education admissions are anticipated, such as the removal of legacy admissions in the US, the University of California dropping SAT scores, and a drop in private school admissions to Oxford and Cambridge from roughly 40% in 2016 to near 30% by 2020.
- Emerging markets like China and India are predicted to maintain high absolute mobility while facing very low relative mobility, and moving to high-opportunity neighborhoods is expected to increase adult earnings by a gap of $12,000 annually.
- Despite the efficacy of neighborhood mobility and specific admission tweaks, scaling location-based solutions is predicted to be too costly and labor-intensive for society, and deep-rooted inequalities may persist if high school graduation rate disparities are not addressed.
- The post-pandemic era is viewed as offering a unique opportunity to expand the scope of social mobility and income inequality policy, potentially shifting perspectives established 15 to 20 years ago.