UK’s low income mobility

Ten years ago, three respected LSE economists produced some startling findings about social mobility in the UK. Summarised in what would become the Sutton Trust’s most famous research report, their conclusion was a political bombshell: social mobility was lower in the UK than in many comparable countries.

The implications for the then Prime Minister Tony Blair were dire – and continue to reverberate to this day. Despite our best intentions to create a society of equal opportunity, the country remained relatively rigid compared with our international neighbours. In the UK, more than elsewhere, people’s income as adults was determined by the income of their parents.

In the wake of the report, many further studies have been published. Several have confirmed the LSE’s results. But others have challenged the findings, using different methods, data, interpretations, and participant countries. A decade on, how does the central conclusion stand up to all this subsequent work and scrutiny?

As is often the case, the media headlines belie what is a highly complex field. The latest example came earlier this year when a study by a US economist using surnames to estimate intergenerational privilege attracted widespread interest, with little discussion about the highly specialised data-sets that underpinned the study. Building up an overall picture of a country’s social mobility is a difficult process, involving a host of caveats, conditions and assumptions.

Most researchers focus on one of three measures to compare social mobility between countries:

1. Educational persistence: how closely related are people’s educational achievements with those of their parents? For example, how much more likely are the children of degree educated parents to go to university themselves?
2. Social class persistence: how closely related is a person’s social class (which is based on their occupation) with that of their parents? For example, how much less likely are the children of unskilled manual workers to achieve professional careers?
3. Income or earnings persistence: how closely related are people’s incomes as adults to their parent’s incomes when they were children?

Each of these classifications has its own weaknesses and strengths, and each tells us something important about patterns of mobility. But we believe there is a compelling case for focusing on income persistence as the most comparable measure of mobility between countries. This is mostly due to the difficulty of comparing social class and education mobility across national boundaries. Put simply, what a certain social class or level of education means is not the same in every country.

For example in the UK low paid, unskilled work is now more likely to mean serving customers in McDonalds or working in a call centre than being on a production line in a factory. But this is not the same in Germany which still has a lot of factories where many low or unskilled people work. This means there are probably many more people in the UK than in Germany who could be described as having a different ‘social class’ to their parents – maybe Dad worked in a factory, but they’re a telemarketer. Does this mean the UK is more ‘socially mobile’ than Germany? Almost certainly not. There are different ways you can define social class which might help with this problem, but none of them solve it completely.

Similar problems plague educational comparisons, particularly given the broad education measures researchers have to work with – which, for example, lump together everyone with a university degree, regardless of subject or the prestige of the institution.

This is why economists tend to focus on the third measure – income. Looking at whether someone whose parents were in the bottom tenth of earners has broken into the top tenth of earners arguably gives us a more concrete idea of social mobility. And comparing where a person is in relative terms provides a particularly powerful comparator of generational change across different nations. And when economists do this, the results are strikingly consistent.

Including the Sutton Trust’s 2005 report, there have been six major studies which have used income measures to rank various economically developed countries (including the UK) in terms of mobility. Their results are summarised below in a table adapted from a recent report by John Jerrim into the relationship between parents’ education and their children’s income (as another alternative measure of mobility).

This is by no means settled science. There are just too many complications and assumptions for any ranking to be the final word. But it is telling that a range of mobility experts from across the world (Finnish, Swedish, Italian, and Canadian, as well as British), using their own judgement and analyses, have all reached the same overall conclusion as our original report. When it comes to relative income mobility, tragically the UK (along with the US) compares poorly with most other developed nations. That’s still as shocking a challenge for the country now as it was ten years ago when the news of low mobility first hit the headlines.