1. The State of Social Mobility in the UK
July 2017

2. 80 years of social mobility in the UK
Social class mobility plateaus
Absolute social class and income mobility increasing 2 1
Relative and absolute social class mobility stable for those born between
Absolute upward social class mobility increasing for those born from 1900s to 1940s (aged 30 between 1930 to 1970s)
Social mobility for individuals aged 30
Relative income mobility fell between those born in 1958 and 1970 (aged 30 in 1988 and 2000)
Millennials (aged 30 from 2010) with lower average weekly pay than previous generations
Average weekly pay increased in real terms generation on generation for those born between 1911 – 1980
Income mobility falling 3
Absolute income
Relative income
Multiple sources
Absolute social class
Relative social class

3. Driven by opportunity, capability and access
Key drivers
Underlying factors
Job opportunities in the economy
Economic growth (creation of opportunities)
Structure of the economy
Geographical distribution of opportunities / growth 1
Influence mobility through key drivers
Structure & quality of education system
Parental education
Health outcomes
Political attitudes
Infrastructure development (e.g. broadband)
Home environment
Public transit investment
Employment support
Housing support
Level of income inequality
Social mobility
Better & fairer opportunities for all
Individual capability development
Hard skills (e.g. literacy, numeracy)
'Non-cognitive' skills (e.g. resilience, motivation)
Parental and community influences 2
Ability to access education & the job market
Admissions & recruitment biases (e.g. race, gender)
Understanding of opportunities (e.g. career paths)
Networks and peer group norms 3

4. UK's educational and income mobility
UK has worst income mobility of OECD...
... but relatively good educational mobility
3.3x
Intergenerational earnings elasticity
0.48
0.50
0.47
0.41
0.32
0.32
0.27
0.19
0.15
0.17
0.17
0.18
Denmark
Austria
Norway
Finland
Canada
Sweden
Germany
Spain
France
USA
Italy UK
Similar picture holds for underachievement at the secondary school level
(1) Source: OECD, Going for growth, 2010.

5. Probability of automation
63% of occupations
Source: Frey and Osborne (2013); Bank calculations

6. Automation will first affect routine tasks
DEMAND INCREASING
DEMAND DECREASING
cognitive
School Teachers
Midwifery & Nursing Professionals
Construction, Distribution & Production Managers
Paraprofessionals (e.g. paralegals)
Sales Assistants & Salespersons
General Clerks
Building and Engineering Technicians
non-routine
routine
Food Trades Workers
Horticultural Trades Workers
Automotive Electricians and Mechanics
Truck Drivers
Hospitality Workers
Bricklayers, Carpenters and Joiners
manual
Source: The Second Machine Age by Brynjolfsson and McAfee, BCG Analysis

7. 'Hollowing out' in the UK workforce
Change in employment shares,
Chart 1: Source: ONS

8. Three pairs of winners and losers
1. High skilled vs low skill workers
Routine work in predictable environments can be substituted, non-routine workers less at risk
Those in work that can be complemented / augmented by technology likely to benefit (as long as on the right side of labour supply)
Likely continuation of income premiums for those with higher education
2. Superstars vs everyone else
Digital technologies increase the 'winner takes all' dynamic of many markets/industries
Talents, insights and decisions of a single person now able to dominate national or global markets and the 'good but not great' local competitors increasingly crowded out (e.g. music, sports, software)
Evidenced by recent income growth of the top 1%, and even more so the top 0.1% and 0.01%
3. Capital vs labour
Substitution of capital for labour leads to owners of capital being disproportionately better off
Capital already capturing a growing share of GDP in recent years (plus corporate profits as % of GDP also at record highs)
Even if a 'worst case' view is not adopted, clear that there will be a painful and (likely) long adjustment period
Source: The Second Machine Age by Brynjolfsson and McAfee

9. Recommendations 1 2 3 Key recommendations Social mobility
Increase job opportunities in the economy
Support innovation & entrepreneurship to drive high value job creation, e.g. in FinTech
Incentivise companies to establish and create jobs outside of London and the South 1
Social mobility
Better & fairer opportunities for all
Develop individual capabilities
Agree a national definition of school readiness; establish local parenting initiatives
Accelerate improvements in teaching quality, especially in disadvantaged areas
Surgically target reductions in the 'Summer gap' in education
Enhance the focus on building 'essential life skills' in less advantaged students
Further promote the apprenticeship and vocational tracks
Increase the study of STEM subjects 2
Ensure fairer and more equal access to education and the job market
Establish common set of metrics for universities to report to the Director of Fair Access
Roll out internship and apprenticeship schemes aimed at increasing participation 3