Economic Mobility

12 Key excerpts on "Economic Mobility"

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  Addressing Inequality in South Asia

  • Martin Rama, Tara Béteille, Yue Li, Pradeep K. Mitra, John Lincoln Newman(Authors)
  • 2015(Publication Date)
  • World Bank

    (Publisher)

  4 119 Substantial Mobility E conomic mobility has often been seen as an avenue to long-term equality (box 4.1). The celebrated Austrian economist Joseph Schumpeter (1955) is said to have likened income distribution to a hotel. The rooms at the top are luxurious, those on the middle levels are ordinary, and those in the basement are downright shabby. At any given time, the occupants of the hotel experience very unequal accommodations. At a later time, if one reexamines who is liv-ing where, one finds that some have moved to higher floors, some have moved to lower floors, and some have stayed where they were. The difference in the quality of hotel rooms provides a static measure of inequal-ity. The movement of hotel guests among rooms of different quality is mobility. The more movement of guests that occurs among floors, the greater is the likelihood of long-term equality in accommodations. Economic Mobility is also a foundation for efficiency. Mobility leads to a better use of talent. If the distribution of creativity or resourcefulness across the population is less unequal than the distribution of income or consumption, societies with greater mobil-ity may be able to mobilize the talent of all population groups and not only those of the better-off. Mobility also strengthens incentives. In a society where the poor and the rich (or at least their children) are equally likely to succeed or fail, people belonging to all groups have a higher motivation to work hard. Mobility has been seen to foster aspira-tion, efforts, innovation, and self-fulfillment. Last but not least, mobility reduces waste. Highly mobile societies are less prone to social conflict and less tempted by redistribu-tive policies, both of which have negative implications for economic growth. Although economists tend to think of mobility in terms of income and consump-tion, economic and social mobility are inter-twined, especially through jobs.

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  Creating Economic Growth

  Lessons for Europe

  • M. Magnani(Author)
  • 2014(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  When it comes to economic prosperity, however, we see that on economic merits alone, facilitating intergenerational mobility allows society to efficiently and effectively tap the talents, brains, and energy of all people. Realizing this efficiency and effectiveness is an economic feat of great value as it allows nations to develop and deploy human resources for ever-greater returns. As a 2007 OECD Report says, ‘if the degree of intergenerational transmission of disadvantage can be reduced, the aptitudes and abilities of everyone in society are more likely to be used efficiently, thus promoting both growth and equity’ (d’Addio, 2007).

  Defining social mobility

  Before we go further, we need to better define social mobility as the term is used in different ways. When a society has high levels of social mobility, individuals, no matter the circumstances of their birth, can easily, during their lifetimes, move either up or down the social ladder. Rising to and staying within a certain social class depends upon factors other than birth and previous social affiliation. In such a society, on a practical level, nepotism, cronyism, elitism, and other brands of favoritism and privilege fail to convey disproportionate advantage to anyone.

  To put it in Blanden et al.’s words (2005), ‘The level of . . . mobility in society is seen by many as a measure of the extent of equality of economic opportunity or life chances. It captures the extent to which a person’s circumstances during childhood are reflected in their success in later life, or, on the flip-side, the extent to which individuals can make it by virtue of their own talents, motivation and luck.’ In a society with low social mobility, occupational position, income levels, and social status tend to perpetuate themselves down through the generations. As people enter and age in the workforce, they find their position in society is very much the same as that of their parents.

  Although the fundamental notion of social mobility is easy to grasp, let’s clarify our specific use of the term. Traditionally, the distinction has been drawn between intergenerational and intra-generational mobility. The former describes changes in social status from one generation to the next, contrasting the positions in society of parents and children. The latter takes into account shifts in social status during the lifespan of an individual. In this chapter, we focus on intergenerational mobility.

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  Fair Progress?

  Economic Mobility Across Generations Around the World

  • Ambar Narayan, Roy Van der Weide, Alexandru Cojocaru, Christoph Lakner, Silvia Redaelli, Daniel Gerszon Mahler, Rakesh Gupta N. Ramasubbaiah, Stefan Thewissen(Authors)
  • 2018(Publication Date)
  • World Bank

    (Publisher)

  51 CHAPTER 1 Economic Mobility across Generations: Why It Matters E conomic mobility across generations, also known as intergenerational mobility (IGM) in the economic literature, is a key element of human progress. Higher mobility can be interpreted in two ways: absolute upward mobility (the extent to which living standards are better among individuals now than among their parents) and relative mobility (the extent to which the relative position of individuals on a socioeconomic scale is independent of the relative position of their parents on the scale). The first interpretation centers on a universal human aspiration among parents for a better life for their children. The second interpretation reflects an aspiration for fairness whereby everyone, regardless of their parental connections or social status, has the opportunity to climb to a rung on the economic ladder that is higher than the rung on the ladder on which they happened to be born. Promoting both types of IGM is essential for a sustainable long-term reduction in pov-erty and an increase in shared prosperity. To achieve sustainable and inclusive growth, public policy must help give scope to such aspirations. However, evidence suggests that, in too many parts of the world, mobility poses a challenge. This concern is espe-cially acute in developing economies: climbing from the bottom to the top of the economic ladder is more difficult in most of these economies than in wealthier ones. If people enjoy less potential for upward movement, econ-omies are less able to generate future growth, reduce poverty, and narrow inequality. This report measures the extent of IGM in economies across the world, how it has evolved across generations and over time, and the factors that may be associated with higher mobility. By reporting findings on a global scale, the study fills an important gap in the empirical evidence on IGM, which to date has been largely limited to relative mobility in high-income economies.

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  Education, Inequality and Social Class

  Expansion and Stratification in Educational Opportunity

  • Ron Thompson(Author)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  Reducing educational inequality may have a part to play in this, but the interactions involved are complex and difficult to predict. It is well known that the greater class mobility in Britain between the late 1940s and the early 1970s was largely due to the first of these conditions being met (Goldthorpe 1980). The second condition would require a reduction in the effectiveness of class strategies aimed at maintaining the position of more advantaged groups; as we have seen in previous chapters, this would imply a move away from policies such as marketization and diversification which are associated with greater inequality – a move unlikely to occur in countries dominated by neo-liberal approaches to managing their economies and educational systems. Patterns of intergenerational social mobility Concerns in the United Kingdom over whether social mobility has stalled are echoed in the United States and in many other countries (OECD 2010; Hout 2015). As is often the case, such debates hinge around questions of definition and measurement: what do we mean precisely by social mobility, and how can we measure it? In his pioneering study, Pitirim Sorokin (1927, p. 133) defines social mobility quite generally as the transition of individuals from one social position to another within a society stratified by attributes such as class, status or income. Transitions between positions at similar levels are examples of horizontal mobility, whilst vertical mobility (upwards or downwards) describes transitions between positions on different social levels. As with educational inequality, choices concerning how stratification is measured depend partly on the disciplinary location of researchers: for economists, social position is most often conceptualized in terms of a continuous variable, such as income, whereas for sociologists, categorical variables, such as social class or socio-economic status, are more likely to be of interest

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  The State of Working America

  • Lawrence Mishel, Josh Bivens, Elise Gould, Heidi Shierholz(Authors)
  • 2012(Publication Date)
  • ILR Press

    (Publisher)

  3

  Mobility

  Not offsetting growing inequality

  The State of Working America documents growing economic inequality in the United States over the last few decades. Due to this rise in inequality, increases in living standards for most American families have lagged overall economic growth.

  For many, these highly troubling developments could arguably be somewhat mitigated by increased Economic Mobility. If American families were regularly climbing up and down the income ladder even as the ladder’s rungs grow farther apart, the historically high level of economic inequality may be of less concern.

  In fact, some observers argue that inequality is not such a serious problem, as everyone has an equal chance of winding up at the top. Their assertion is the essence of the American Dream: Regardless of where you begin, if you work hard, you have opportunities to succeed.

  This chapter examines mobility, a critical measure of economic well-being. Specifically, mobility measures the likelihood of moving up or down the distribution of incomes, earnings (i.e., labor income/wages), and wealth, comparing people and families relative to one another across time. If the data showed, for example, that many families are likely to move from the bottom fifth on the income or wealth scale to the top over time, or that children of wealthy families switch places with middle-class children when they become adults, we could conclude that the benefits of economic growth were more broadly shared than the inequalities highlighted in the other chapters suggest.

  But the research does not find that increasing mobility is offsetting the increasingly skewed distribution of growth. Rather, most families are stuck in place while economic growth passes them by. In this respect, then, reality does not match the dream. Mobility—movement among economic classes—is much more restricted than in the opportunity-rich ideal of the American Dream.

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  Social Mobility in Traditional Chinese Society

  Community and Class

  • Yung-Teh Chow(Author)
  • 2018(Publication Date)
  • Routledge

    (Publisher)

  The Forms of Social Mobility

  So far the term "social mobility" has been used to indicate the over-all changes of status of individuals and families, regardless of the various forms of social mobility. The term needs to be supplemented by reference to the changing of occupation and residential area, which are closely related to social mobility. Furthermore, although upward mobility has attracted more of our attention, it should be remembered that social mobility has two directions: up and down, ascending and descending, social climbing and social sinking.

  The members of the gentry who climbed to the top rung of the social ladder were men in motion. They moved from one occupation to another, from place to place, and from one position to another. There was "circulation of the elite" among the official positions of the local government. The gentry moved back and forth throughout the community. Above all, the sudden rise to wealth of some families meant some other houses were ruined. The aim of this chapter is to supplement the general conclusion reached by examining status mobility as a whole.

  Occupational Mobility

  The family and the school were the principal institutions to test the general biological, mental, and moral qualities of men and to determine only tentatively and in general in which of the fundamental strata an individual was to be placed and what kind of activity he was to follow. Such decisions, even for those who had successfully passed these "sieves" were, however, not final. They were further retested and reconsidered among those occupational organizations in which the individuals engaged. This process was of even greater importance for those who had not passed through all stages of the general agencies or who had failed. This group was tested principally by the occupational machinery. The decisions of the general agencies were close to being final in the sense that a series of privileged occupations was closed for a great majority of the "failures" in the family and school tests; and a great many men who successfully passed these tests were directed principally toward the privileged occupational groups. Even in those fields, however, there were exceptional revisions and alterations of the decisions in the general agencies by an occupational group. These organizations were especially important in testing the specific abilities of individuals necessary for successful performance of given forms of work. From all these points of view the testing and selecting role of an occupational organization was enormous.1

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  Management of Success

  Singapore Revisited

  • Terence Chong(Author)
  • 2010(Publication Date)
  • ISEAS Publishing

    (Publisher)

  If “origin status” refers to the status of his or her parent, social mobility is then known as inter-generational mobility. This chapter will examine empirically both general social mobility using aggregate data and inter-generational mobility when data linking generations is available. There is another important dimension of social mobility: absolute versus relative mobility. S 218 Management of Success While it is possible to have absolute upward mobility for all, it is impossible to have relative upward mobility for all as the relative upward mobility of a person must be accompanied by the relative downward mobility of another person. Changes in the weights of each relative position in a social ladder give a measure of the changes in the distribution of people in the social ladder, and hence relative social mobility is related to inequality in society. Forces affecting social mobility, which is dynamic as it is a measure across time, will determine how a static measure of inequality will evolve over time. As Singapore experiences rising trends of inequality, it is all the more important to understand the determinants and trend of social mobility in Singapore. If rising inequality is accompanied by increasing upward social mobility, could the temporary adverse effect of inequality be offset by the benevolent effect of upward mobility? Is the relation between inequality and upward mobility always positive, or negative? Hence, it is important to understand, theoretically and for policy analysis, that both inequality and social mobility are jointly endogenous, influenced by other variables such as structural changes in technology, demography, and government policies in education and the labour market. This chapter will contribute to this understanding by developing a simple demand-supply framework of social mobility and inequality, and in particular, wage inequality.

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  Urban Headway and Upward Mobility in India

  • Arup Mitra(Author)
  • 2020(Publication Date)
  • Cambridge University Press

    (Publisher)

  A shift from an occupation which bears more manual work to an occupation with less manual work can be treated as upward mobility though it is not necessarily a shift in terms of ‘class’ as defined on the basis of hierarchy at work (Weber, 1968). 11 Fields (2000) 12 describes five basic approaches to conceiving income mobility: time dependence measures the extent of change in one’s current position determined by the past position; positional movement gauges changes to an individual’s 8 Average incomes of course showed differences across activities. 9 However, those who are just literates or studied up to class 9 earn as low as the illiterates. 10 See Mitra (2010a, 2010b) for details. 11 Social class concept is grounded in the presumption that the social location of individuals is determined primarily by their employment status and job characteristics (Grusky and Kanbur, 2006). 12 As summarized by Narayan and Petesch (2012). Upward Mobility of the Disadvantaged Sections 101 position in the income distribution; share movement captures changes in the share of income; symmetric income movement identifies the magnitude but not the direction of movements, and directional income movement weighs the fraction of upward and downward movers and the change in the average amount of the gainers and losers. Baulch and Hoddinott (2000) present studies using household longitudinal data ranging from 18 months to 18 years to examine poverty dynamics and Economic Mobility. In studying such movements, households which move in and out of poverty over time can be identified and so also their vulnerability changes in relation to changes in their endowments and the returns to those assets. Among the various determinants of mobility transport, network is an important one. It is not evenly spread out in all parts of the city to facilitate labour mobility. It rather has a strong bias in favour of the well-off (Dayal et al., 2012).

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  Happiness and Hardship

  Opportunity and Insecurity in New Market Economies

  • Carol L. Graham, Stefano Pettinato(Authors)
  • 2004(Publication Date)
  • Brookings Institution Press

    (Publisher)

  During the indus-trialization of the nineteenth century, economic opportunities and rewards were largely determined by a capital-labor divide. With the turn to high technology growth, a similar divide exists between educated and unedu-cated workers, enhancing the opportunities and rewards of the former, and decreasing the returns to the labor of the latter. We argue that individuals' assessments of their well-being are more likely to be influenced by their mobility—both intra-and intergenerational— than by aggregate and static measures of inequality, such as trends in the Gini coefficient in their particular country. We also contend that their assessments are influenced by the fate of other individuals, particularly those in their reference groups. Moreover, awareness of how others are far-ing has increased with the spread of technology and global information, and it is likely that increasing numbers of individuals in the developing world are aware of how they are faring relative to those within and beyond their reference groups. Trends: What Is Known and Unknown about Mobility Although measuring mobility is conceptually appealing, doing so accurately is difficult. Accurate measurements require data about specific individu-als over prolonged periods of time—this is, panel data. Many advanced 6. There is a wide literature on this issue. For detail and references, see Sawhill (2000); Behrman, Birdsall, and Szekely (2000b). 7. Behrman (2000). 42 CONCEPTS AND TRENDS IN INCOME MOBILITY industrial countries have at least one nationally representative panel survey, but these surveys, which are expensive to develop and maintain, are rare for developing countries. Some panel data are available for particular periods in individual developing countries, but it is impossible to reproduce panel data for past time periods for which they do not exist. We therefore must infer, where possible, broader patterns and trends from the sparse data available.

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  Jobs Aren't Enough

  Toward a New Economic Mobility for Low-Income Families

  • Roberta Iversen, Annie Armstrong(Authors)
  • 2006(Publication Date)
  • Temple University Press

    (Publisher)

  2 From the Old to the New Economic Mobility E VERYONE HOLDS IDEAS about how things work, what causes events, and what the good life or good world is. For centuries scholars and others have theo-rized in particular about people, society, and work. For example, during the period of widespread industrialization and the development of advanced capitalism, soci-ologists put forth various explanations for economic differences in the population. In the late 1800s, Marx (1867/1978) attributed these differences to the exploita-tion of workers by the owners of the means of production. Holding that mobility is impossible under capitalism, Marx argues that only a socialist revolution can eliminate economic inequality. In the early 1900s, Weber (1922/1978) expands the explanation of economic differences to class, status, and political processes, positing multiple causes and origins of economic, social, and political inequality. At the same time Weber holds that bureaucratic forms of organization both create and mediate such inequalities. Since the mid-1900s, scholars and policymakers have focused more intensively on inequality and differential attainment, spurred by Blau and Duncan’s (1967) research on stratification and mobility in education and employment. Civil rights activism and legislation, and the growing recognition that, rhetoric to the contrary, opportunity for Economic Mobility is for some but not all in America, subsequently led to a bifurcated line of study. Accordingly, stratification research tends to focus on the effects of ascribed individual characteristics such as race, gender, or fam-ily background on attainment (Blau & Duncan, 1967; Kerckhoff, 1996), whereas poverty research tends to focus on attained individual characteristics such as educa-tion or work experience (Danziger & Haveman, 2001), although race, as a socially constructed rather than ascribed category, is a recent focus as well (O’Connor, Tilly, & Bobo, 2001).

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  The Success Paradox

  Why We Need a Holistic Theory of Social Mobility

  • Atherton, Graeme(Authors)
  • 2016(Publication Date)
  • Policy Press

    (Publisher)

  The problem with concentrating on economic status as the sole measure of individual progress is that it makes it harder to persuade people to support the kind of redistribution that is necessary to ameliorate this inequality. While it appears that there is an increasing willingness to confront the reality of inequality, there is less of an appetite to confront the contradiction that if you construct an economic measure of success, how can you persuade people to give up the very thing that will make them successful? Nurturing the kind of commitment to redistribution necessary to make a big dent in the growing inequality at the national and global level depends on changing how success is defined. In turn, this means extending the definition of social mobility. Social mobility depends on jobs that are not there The UK, alongside most other developed (and many developing) countries, signed up enthusiastically in the 1990s to the global ‘race for talent’ idea – that is, the belief that the only way for economically developed nations to compete on the global economic stage is to invest in improving the quality of their labour force. In the late 1990s and early 2000s, the vision of a ‘knowledge-driven economy’ took root across the developed world. Its antecedents go back to human capital theory and Daniel Bell’s industrialisation theories (Drucker 1959). In an era defined by economic globalisation and the power of transnational capital, developing the quality of their human capital is the only way that countries can gain a competitive advantage (Reich 1991, Michaels et al 2001, Florida 2005).

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  Social Stratification and Career Mobility

  • Walter Müller, Karl Ulrich Mayer, Walter Müller, Karl Ulrich Mayer(Authors)
  • 2019(Publication Date)
  • De Gruyter Mouton

    (Publisher)

  These rival orientations of social mobility may pose a real value-dilemma be-tween economic and occupational success on the one hand and satisfactory Social stratification and career mobility 109 social relations, emotional and sexual ties on the other which cannot easily be resolved by manipulating the personal time-budget. This point has been phrased succinctly by Wilensky (1960, pp. 549-550): Apparently the United States (perhaps every industrial society) has so structured the timing and balance of obligations in the economic, kinship and other spheres that peak demands in economic life (launching a career, getting established in a job) coincide with peak demands in procreation and hence consumption — doubtless a source of strain for both person and social structure. Since only about 10 percent of our respondents see aspects of society at large or their own personality as changing, it may be concluded that the socio-logical idea of social mobility as changes in social structure with the individual as a moving unit has an extensive counterpart in subjective definitions. Diffe-rences in the perception of mobility in the past and future clearly reflect diffe-rences in career patterns associated with various levels of occupational sta-tus. In the past, higher status groups more frequently perceive educational and occupational changes, in the future, they expect familial changes and occu-pational advancement more often than the lower groups. Longer training, delayed career beginnings and delayed marriage lead to a more frequent arti-culation of mobility concerns in these dimensions. Although both questions on aspirations are slightly weighted in favour of the occupational viz. economic dimension, some respondents define their hopes and wishes with respect to the family, some in terms of education and quite a few in terms of leisure activities. Nonetheless, the bulk of aspirations are connected with the occupational and economic position of the individual.

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