Social Mobility Over Time Sutton Trust, Social Mobility 2017, July 12 2017 Social Mobility Over Time Stephen Machin

Three Key Aspects of Social Mobility Over Time 1). Changes in UK social mobility over time - what we know and more recent evidence. 2). Implications of recent labour market changes in the UK for absolute mobility. 3). The credibility and relative emphasis placed on different policy goals aimed at enhancing social mobility.

Social Mobility Over Time 1 There has been a supposed ‘controversy’ about this. Income/earnings mobility falls over time as the earnings of the 1970 birth cohort are more strongly related to the income of their parents (Blanden, Gregg, Machin, 2004; plus subsequent corroborations). “Big” social class mobility did not change (Goldthorpe and Eriksson, 2010).

Social Mobility Over Time 2 The ‘controversy’ is easily reconciled: Inequality rose sharply and there is (in part) a mechanical relationship between higher inequality and lower social mobility. “Small” social class mobility falls over time because of occupational shifts within the ‘big’ social classes (Laurison and Friedman, 2017).

Social Mobility Over Time 3 iii) The observations in i) and ii) arise because inequality rises within the “big” social class groups. iv) Savage’s (2015) super elite has become very sticky at top.

Social Mobility Over Time 4 The reconciliation stresses that social mobility fell and also that the UK has always been low in the international league table (as Goldthorpe’s work has confirmed for a long time). Newer evidence (Blanden and Machin, 2017) shows home ownership correlations strengthen across cohorts in more recent data (aged 42 in 2000 and 2012) seem to imply falling wealth mobility.

Social Mobility Over Time 5 1958 and 1970 Cohort Comparison Generational Changes Over Time Notes: From Blanden and Machin (2017).

Relative and Absolute Mobility 1 That was all about relative mobility. But recent changes in the labour market also raise the possibility of no improvements, and maybe a worsening, of absolute income mobility. In the past in the UK there has been less worry about this, because of rising real wages, but recent trends of real wage stagnation generate cause for concern. In fact there have been real wages across the board and big real wage falls for some groups.

Relative and Absolute Mobility 2 Median Real Weekly Wages, 1980 to 2016 Variations Since 2008 By Age Notes: From Costa and Machin (2017). Weekly earnings deflated by CPI, CPIH and RPIJ from Annual Survey of Hours and Earnings (ASHE).

Relative and Absolute Mobility 3 International Comparison, 2007 to 2015 Notes: From Costa and Machin (2017). Average real wages defined by the ratio between total wage bill and average hours worked. Source: OECD Stats, 2016 (https://stats.oecd.org/).

Relative and Absolute Mobility 4 A massive warning sign why these recent trends matter comes from the US where median real wages have not grown for the last three decades. Notes: From Katz and Krueger (2017). Notes: From Blanchflower and Machin (2014).

Policy Debate 1 It is a rather strange to think of social mobility – the outcome of many factors individuals and their families experience – as a policy goal in and of itself. It is the drivers of the level of social mobility that has to be the focus of policy debate, and we need better models of how these drivers work for policy to be able to improve the equalising impact of the drivers for the social mobility position to improve. The key issues are educational and labour market inequalities.

Policy Debate 2 So, we need to be clear and get it right on educational and labour market inequalities and how they connect to falling social mobility. Education (“the great leveller”) has acted to reinforce already existent inequalities – it has been disequalising and caused social mobility to fall, and not the opposite. The balance in policy debates has been much too skewed to education, rather than the labour market, and specifically towards elite education.

Prospects Social mobility – however measured – is low in Britain. Post-1970 birth cohorts show no improvement in mobility. There have been (minor) improvements in school outcomes. But completed education does not seem to be improving – PIAAC (16-24 year olds literacy/numeracy); education ‘arms race’ (as many more people get to university, this from richer families have increasingly gone on to postgraduate level); the rise of insecure work arrangements and jobs with lack of career development, with higher incidence of these amongst the young, for whom absolute mobility is falling.