1. Education as the great equalizer? Education as a social elevator?
Fabrizio Bernardi, EUI
"Inequalities”
Dondena 10-year Anniversary Workshop
Milan 29/4/2016

2. 30/01/2018
“Education then, beyond all other devices of human origin, is the great equalizer of the conditions of men, the balance-wheel of the social machinery” Horace Mann 1848
“In societies where the schools are accessible to all members , the school system represents a “social elevator” moving from the very bottom of a society to its real top”
Pitrim Sorokin 1928
Promote social equity and social efficiency

3. Overview
Main results of a comparative project on education as the great equalizer that has involved research teams for 14 countries (most EU but also US, Russia, Israel and Japan)
Two mechanisms that undermines the role education as the great equalizer : the compensatory advantage and boosting effects associated to social background

4. Socio-economic background: Income, socio-economic status, class
Education as the great equalizer? E
Education D
LM outcomes:
Income, socio-economic status, class O
The focus of the study is on the red line
The direct effect of social origin net of education
Socio-economic background: Income, socio-economic status, class
If no effect of O on E and no effect of O on D  education-based meritocracy
If no direct effect of O on D, controlling for E, then education functions as equalizer

5. Research questions
Is there a direct effect of social origins (DESO) on labour market success over and above the effect of own education? Also critical case to test the education based meritocracy claim
Does DESO vary depending on the level of education achieved and, more precisely, is it weaker among those with higher education? 5

6. Why a direct of effect of social origin (DESO)?
5 possible mechanisms:
differences in productivity; non-cognitive skills (eg., communication skills) or personality characteristics (eg., assertiveness) not captured by education
Social networks: access to information
Career aspirations; those from higher social standing are more career-oriented and more willing and able to take risky choice that, later on, pay off in terms of higher earnings.
Favouritism refers to employers’ preferences to hire for better jobs those who come from high SES families, all other conditions being equal and/or direct influence of the parents.
direct inheritance of the family business.

7. RQ2: A weaker effect of social origin among those with higher education? Is university education the great equalizer?
More meritocratic labour market for university degree holders (Hout 1988);less favouritism, social networks
Life course effect; less social networks
Positive selection of those with working class origins; unobserved productivity

8. 30/01/2018
Variables and methods
Dependent variables: ISEI (International socio-economic index; 90= Judge, 16 farm labourer) and earnings (net and log)
Earnings: trends toward increasing inequality within occupations
Occupation based measure (ISEI): less measurement error, better predictor of life-chances and life-long earnings
Key independent variables:
Parental ISEI (dominance principle)
Own education (defined with most detailed classification in each country) but no correlation between #levels and size of DESO
Control for gender, age (and self-employment)
weighted sum of socioeconomic characteristics of incumbents of each occupation, usually education and income,

9. Variables and methods
We focus on the first and current job. In the analysis for current job we control for age and age squared.
Models: OLS and quantile regression for earnings
Age selection

10. Is there a DESO?
Effect of parental ISEI on respondent’s ISEI

11. Father-son gross association for occupational status is btw. 2 and
Father-son gross association for occupational status is btw .2 and .4 in all countries.
When education is controlled for (grey bars), the association decreases by 1/2 to 3/4. So the main impact of family background goes through education.
However, the remaining direct effect is not trivial. In most countries DESO lies between .10 and .15.

12. A 65 points variation in parental ISEI (i. e
A 65 points variation in parental ISEI (i.e. having a parent who is a medical doctor instead of an unskilled worker) is associated on average with an increase of points in own ISEI, net of achieved education. Such a difference is the one separating, for instance, a university professor from a high school one, or a taxi driver from a windows cleaner.

13. Some benchmarking: In US, net of education being black is associated on average to 4 ISEI points penalty. In Norway, Spain, the UK, net of education the gender penalty is 2 ISEI points.
Gender and race inequalities receive (rightly) a lot of attention from research and policymakers, while social background inequality often is overlooked

14. Results concerning earnings are less clear, because of measurement problems: family income (US)/individual income; annual (France)/monthly (UK); gross (NO)/net (UK) etc. However, a DESO on (log)earnings is found in all countries (Except Israel and Germany). Its magnitude varies btw .005 and .0005, with a number of countries (eg Spain and UK) around In this case, a difference in parental ISEI of 65 points (medical doctor versus unskilled labourer), is associated to an increase in monthly earnings of about 20% (65*.003). For instance: 1.500€ + 300€. Again, not a trivial difference.

15. Does DESO vary by level of education
Does DESO vary by level of education? Is university education the great equalizer? ISEI
Effect of parental ISEI on respondent’s ISEI

17. Spain, intergenerational ISEI association by level of education
Here spain

18. Does DESO vary by level of education? Income
30/01/2018
Does DESO vary by level of education? Income
10% increase is associated to 1.7% increase in fmaily income
50% to a 7% increase
100% to 13%

19. Household income; Spain

20. To sum up: results change substantially for the two outcomes.
In the case of ISEI, in most of the countries (11 out of 14) we find what we label a compensation effect: DESO is stronger for the less educated.
In the case of earnings, in many countries (8) we find a positive interaction btw DESO and education: DESO is stronger for the more educated, or for those who earn more. This might be called a boosting effect.

21. Social mobility theories: Downward mobility avoidance (Boudon)
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With respect to the idea that market for university degree holders is more meritocratii, we take a different view.
Social mobility theories:
Downward mobility avoidance (Boudon)
Effectively maintained inequality (Lucas)
1. Stronger DESO among subjects with low educational attainment to avoid downward mobility  compensatory effect
2. Stronger DESO among those with high educational attainment to maximize returns  boosting effect
“High SES families secure for themselves and their children some degree of advantage wherever advantages are commonly possible” (Effectively maintained inequality)  earning variation within occupations .

22. Compensatory advantage
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Compensatory advantage
Upper class
Probability of making the educational transition at time t+k
Lower class
Grades at time t
Inequality by social class is larger among “academically low performing students”

23. Predicted probabilities of entering university by social background and upper secondary mark among students from the academic track

24. Compensatory advantage
ISEI
Primary
University
Education

25. Boosting
Income
Primary
University
Education

26. An Italian example (just for fun): the Agnelli heirs
John: boosting effect
I don't have an MBA, and I didn't go to Yale. I'm not an academic person and wasn't a good student. Instead, I've been taught by some of the most inspiring people in the world. Lapo Elkann
Read more at:
Lapo: compensation effect

27. Conclusions
Our results question the idea of education as great equalizer and social elevator
For low educational achievers from better-off families, the elevators still moves up some floors and allow them to avoid downward mobility and to reach more “decent” occupations
In case of high educational attainment, those from better off families profit from a boosting effect in terms of income

28. School and university perform many major societal functions
But they can not alone win the battle for more equality/efficiency

29. Thank you!

30. A new analysis for Spain based on parental occupation fixed effect” (166 occupations)

31. The strongest premium associated to parental occupations net of education
Results from a parental occupation fixed effect” (166 occupations)