Major - Social Mobility

UK | USA | Canada | Ireland | Australia

India | New Zealand | South Africa

Penguin Books is part of the Penguin Random House group of companies whose addresses can be found at global.penguinrandomhouse.com.

First published 2018

Text copyright Lee Elliot Major and Stephen Machin, 2018

The moral rights of the authors have been asserted

Cover by Matthew Young

All rights reserved

Book design by Matthew Young

ISBN: 978-0-241-31703-7

Intergenerational Mobility in the 1958 Birth Cohort

---

Intergenerational Mobility in the 1970 Birth Cohort

---

9010 Wage Differentials, 1980 to 2017

---

International Differences in Intergenerational Elasticity

---

Probability of Moving from Bottom to Top Quintile

---

The Great Gatsby Curve

---

Percentage of Owner-Occupiers at Age 42 in Two Generations

---

Real Wages in the 1980s

---

Real Wages in the 1990s and 2000s

---

UK Productivity, 19802017

---

Real Wage Changes, 20082017

---

The Geography of Upward Mobility in America

---

Social Mobility in England by Local Authority

---

Leave Voters in the EU Referendum in England

---

Brexit and Social Mobility in Englands 320 Local Authorities

---

Private Tutoring of Secondary School Children, 20052016

---

Cognitive Development of Young Children and Their Parents Socio-Economic Status

---

Highest Educational Qualification: Percentage of 2630-year-olds

---

Educational Inequality, 1981 to 2013

---

Wage Differentials by Highest Education Qualification, 2630-year-olds

---

Sample Question in OECD Basic Numeracy Test, 2012

---

Numeracy Levels by Age: England

---

Numeracy Levels, 1629-year-olds, by Country

---

Numeracy Level 1 or Lower in England, by Age and Parental Education

---

Percentage in Selected Professions Who Were Privately Educated (2012)

---

Private/State School Wage Differentials for 3334-year-olds

---

Percentage of Dual-University-Graduate Families by Region

---

Average Family Income by Region

David C: Its where you going to, not where youre from that counts.

David B: I know that if I set my mind to do something, even if people are saying I cant do it, I will achieve it.

One David was born in a terraced house in East London, his father a kitchen fitter, his mother a hairdresser. The other David grew up in an idyllic village in the English countryside, his father a stockbroker (and the direct descendant of King William IV ), his mother the daughter of a baronet. The first David left school at sixteen without any qualifications; the second studied at Eton and Oxford. One married an Essex girl. The other married the daughter of a wealthy aristocrat.

Both Davids have led successful lives and, in their own way, each highlights Britains social mobility problem.

David Beckhams meteoric rise is a rare occurrence in modern Britain. Few children born to poor parents climb the income ladder all the way to the stratospheric heights of global stardom. A shockingly high number leave school without the basic literacy and numeracy skills needed to get on in life, and end up in the same poorly paid jobs as their fathers and mothers.

David Cameron continued a tradition that has seen successive generations of social elites retain their grip on the countrys most influential positions. Every prime minister since the end of the Second World War who has attended an English university has attended just one institution: Oxford.

Social mobility tells us how likely we are to climb up (or fall down) the economic or social ladder of life. And whilst some people are upwardly and downwardly mobile, too many of us are destined to end up on the same rungs occupied by our parents.

The tale of the two Davids can be used to illustrate the different ways of measuring social mobility. Each measure highlights a different way of benchmarking success in life. Beckhams rags-to-riches story is defined by how rich he has become compared with his parents. We call this intergenerational income mobility. Economists like to use income as a metric because it is a reliable way of comparing one generations status to the next, or of comparing one countrys mobility levels to anothers. A pound is a pound, and a dollar is a dollar, even if its purchasing power changes over time. They talk in terms of intergenerational income persistence, the opposite of mobility: it tells us how the incomes of families persist from one generation to the next.

Figures we have compiled reveal that the low levels of income mobility in Britain are due to a stickiness, or immobility, at the bottom and top of the income spectrum. Children born into the highest-earning families are most likely themselves in later life to be among the highest earners; at the other end of the scale children from the lowest-earning families are likely to mirror their forebears as low-earning adults.

The U-shaped curves in

If there was complete mobility, the chart would be a flat line; every bar would be at 20 per cent, reflecting an equal chance of ending up in one of the five quintiles. But there is instead a shallow U-shaped curve. A quarter of the sons from the fifth poorest homes remained in the poorest fifth of incomes as adults. And 32 per cent of children born into the richest top fifth of homes stayed among the richest homes when they grew up.

The second graph reveals a deeper U-shaped curve describing the mobility of the generation born in 1970. Over a third (35 per cent) of the sons born in 1970 from the fifth poorest homes remained in the poorest fifth of incomes as adults. Meanwhile 41 per cent of children born into the richest top fifth of homes stayed among the richest homes as adults. In just one decade, Britain had become less mobile.

Beckham is the exception to the rule in a generation of lower social mobility. His annual earnings make him one of the most mobile people in Britain. He is paid millions of pounds, hundreds of times more than the money made by his father. Born in 1975, Beckham is five years younger

Figure 0.1
Intergenerational mobility in the 1958 birth cohort. Figure 0.2
Intergenerational mobility in the 1970 birth cohort.

David Cameron meanwhile was, in pure income terms at least, a downwardly mobile prime minister. Born in 1966, he is four years older than the cohort summarized above. Earning around 150,000 a year by the time he left office, Cameron would rank comfortably among the top fifth of earners if he featured in these charts. But he was earning far less than his father, who as a successful stockbroker made millions.

The global Beckham brand highlights the huge financial rewards that can be generated in a world economy without national boundaries. But globalization and rapid technological change have created bigger gaps between societys winners and losers. The middle stem of Britains hourglass economy is disappearing. Britains rich have been enriched by economic growth. Britains poor have inherited greater job insecurity and poorer pay.