How to Improve Social Mobility

People are very worried about rising income inequality in many countries and across the world. There is a growing perception that social mobility across generations has declined and that only the very rich get richer. There is a concern in the developed countries that raising everyone to better standards is less possible. The costs tend to increase as more healthcare and more education is provided to all citizens. There is a 63 page OECD study from 2018 on Social Mobility. Based upon the comparison of OECD countries, the countries that are ranked as doing the best on social mobility are Denmark and Sweden. The Recommendations from the OECD report are listed below. This is a complex issue and this OECD has biases and issues. This article is just the beginning of searching for better answers on this topic. Policies should aim at ensuring equal opportunities for moving up the ladder, even and especially for those at the low end, while preventing the top end from pre-empting advancement. 1. education measures to support social mobility and to avoid unequal opportunities in the long run include access to high-quality early education and care, as well as formal education for all, while preventing school drop-out. 2. Public investment in health has the potential to support social mobility over the life course and across generations, for example by cushioning income losses or necessary labor market changes when health issues arise. A strategy based on greater investment in children targeting those from lower socio-economic backgrounds holds the promise of breaking the cycle of intergenerational disadvantages. In particular, access to sickness insurance for all households is a prerequisite. 3. Family policies. Policies that promote a good work and family balance, early education and care policies and services, can help level the playing fields for all children by compensating disadvantages at home and avoiding the transmission of disadvantages to children. They can also support parents in their participation to the labor market and mitigate the detrimental impacts of financial hardship on children’s future outcomes. 4. Policies affecting wealth accumulation and savings behavior are an important tool for enhancing social mobility. Avenues to rebalance opportunities would be to limit wealth, inheritance and gifts tax avoidance, design progressive tax systems with adequate rates and reduce exemptions. 5. Fostering social mobility also requires policies to reduce regional divides and spatial segregation in cities. This necessitates a range of well-coordinated local development and urban planning policies including measures for transport and housing, such as inclusionary zoning policies.

Issue: “Sticky floors” prevent people from moving up

  • Children with a disadvantaged background struggle a lot to move up the ladder, and this is true for many different important aspects of life. Poor families can have children with inferior health.
  • While two-thirds of people with low-earnings parents succeed to move to a higher status, for almost half among them, upward earnings mobility is limited to the neighboring earnings group. As a result, in an “average OECD country” it would take around four to five generations for children from the bottom earnings decile to attain the level of mean earnings.
  • Upward mobility for people with lower educated parents tended to increase for individuals born between 1955 and 1975, but then stagnated for those born after 1975 – sticky floors persist.

Issue : Opportunity hoarding leads to “sticky ceilings”

  • Those at the top of the distribution are effective in ensuring that advantages are passed on to their children.
  • Individuals with higher educated parents tend to have better educational outcomes in terms of literacy and numeracy than those whose parents have low educational achievement. For instance, numeracy scores are almost 20% higher for those with parents with higher socio-economic status, representing more than three years of equivalent additional schooling.
  • Children end up in similar occupations to their affluent parents. Half of children whose parents are in the managerial class become managers themselves, but only less than a quarter of children of manual workers have a chance to become managers.

28 thoughts on “How to Improve Social Mobility”

  1. “The Emergency Medical and Treatment Labor Act (EMTLA) passed by Congress in 1986 explicitly forbids the denial of care to indigent or uninsured patients based on a lack of ability to pay.”
    Have that law repealed and those 10-15 million 20 & 30 year olds can go back to having no insurance.

    healthcare gov site:
    For the 2019 plan year: The out-of-pocket limit for a Marketplace plan is $7,900 for an individual plan and $15,800 for a family plan.

    Things don’t just happen, they happen for a reason.

    “33-million-americans-still-dont-have-health-insurance: …It isn’t a surprise that some Americans still don’t have health insurance. Despite aiming to insure “everybody” in the U.S., the Affordable Care Act left significant gaps in coverage, and decisions made by the law’s opponents have denied benefits to millions of people it was designed to help…”

  2. Homelessness isn’t a cartoon, your portrayal of its roots and your view of reality in general is a cartoon.

    In your world, the fact the average hourly wage of renters in the U.S. is $16.88 and the federal minimum wage is $7.25 has no bearing on homelessness, it’s actually the free spot in an encampment and a free spot on the sidewalk to take a dump that is luring many out of the workforce.

    The simple minded mantra of “You get more of what you subsidize” does not cover the complexities of objective reality. If you want less encampments and less feces on the sidewalks, you need housing and social services for the homeless. If you don’t want to pay for housing and social services for the homeless then everyone wage needs to be above the housing minimum rate.

    No local minimum wages are sufficient to afford a one-bedroom rental home at the Fair Market Rent with a 40-hour work week, you need to work over 80hrs in my area. Arkansas has the most affordable housing in the country, its one-bedroom housing wage is $10.98 and their minimum wage is $8.50.

  3. It’s not a cartoon. It’s a fucking tragedy, aided and abetted by people who are consumed by pathological altruism – who are told they must do everything possible to help the unfortunates… no matter how ‘unexpected’ the results are.

    You get more of what you subsidize.

    At last, the problem became so acute — and so visible — that Los Angeles took extraordinary action. To your credit, to all of our credit, the citizens of this city and this county voted in November 2016 and again in March 2017 to raise our own taxes to fund an enormous multibillion-dollar, 10-year program of housing and social services for the homeless.
    As a result, Los Angeles now has its best chance in decades to combat homelessness — an opportunity that surely all can agree must not be wasted.

    And more will come to take advantage of it.

    Re minimum wage…

    Unexpected results. Gee. Who’d have thought that might happen?

  4. Wealth is a measure of how much resources are available. Limiting access to resources will not give you anything, but will deprive you of things, so why do that?

  5. “…Look at Seattle and San Fran. That’s working really well for folks who do not want to work.They show up, register as ‘homeless’, and they get freebies, handouts, and crap in the streets…”

    Everyone needs a hobby, if i had more fee time I’d go sign up for all that good free stuff. Who knew the homeless were living the good life.

    Seriously, you’ve reduced the homeless problem to a cartoon.

    The average hourly wage of renters in the U.S. is $16.88. The federal minimum wage is $7.25.

    National Law Center on Homelessness & Poverty

    “According to the most recent annual survey by the U.S. Conference of Mayors, major cities across the country report that top causes of homelessness among families were:(1) lack of affordable housing, (2) unemployment, (3) poverty, and (4) low wages, in that order. The same report found that the top four causes of homelessness among unaccompanied individuals were (1) lack of affordable housing, (2) unemployment, (3) poverty, (4) mental illness and the lack of needed services, and (5) substance abuse and the lack of needed services”

    Washington Council of Governments 2017

    “22 percent of homeless single adults
    and 25 percent of adults in homeless families are employed. New York’s Department of Homeless Services: 70% of the city’s 60,000 people living in homeless shelters are families—and 34 percent of those families include a working adult”

  6. In case you didn’t do the math from the other post – it’s (1200*12)+10000 out of pocket.

    Or, to replace a $1000 policy with a $10k combined deductible they’re now out of pocket for a minimum of $14,400 a year, MINIMUM, and $24,400 before everything’s covered for one person.

    Isn’t that ‘better‘?

    Oh, and the number of people who weren’t covered during the height of the ACA, when it was MANDATORY to have insurance, no matter how expensive?

    Remember – the health care insurance system in this country was upended so we could get about 10-15 million covered.

    About 33 million.


    So when you start going ‘we need a society that works better for most’, I think you’ve got to define ‘most’ very carefully and ‘better’ even MORE carefully – and resist the urge to screw with stuff that’s working pretty well for the majority in an attempt to make it better to take care of outlier scenarios. Because government’s really good at taking things that work, pretty much, and improving them to a point where they’re damn near unusable.

  7. Short form? No, I don’t. And ‘better for most’ is a pretty nebulous end goal.

    Look at Seattle and San Fran. That’s working really well for folks who do not want to work. They show up, register as ‘homeless’, and they get freebies, handouts, and crap in the streets. Works well for them, if you discount the diseases that are becoming endemic because of poor/no sanitation.

    Doesn’t work so hot for the rest of the population, though.

    The ‘Affordable Care Act’ was supposed to make health care cheaper for all, and cover some 10-15 million who, for whatever reason, didn’t have it. (This included folks who simply didn’t want to spend money for it in their 20s and 30s.)

    It took a system that worked pretty well and was relatively affordable for 300+ million – and turned it into a friggin’ expensive clusterfuck. Had some friends who were very happy with their $1000 a year catastrophic care policy with a $10k deductible, after which everything would be covered.

    That policy disappeared, and they had to get a government approved policy that had the full wish list of ‘We think it’d be great if you had this, whether you want it or not’. (Up to and including mental health care and pregnancy coverage – which was decidedly superfluous since she no longer had the needed equipment to support a pregnancy and, as she put it “Even if I did, I know how to use goddamn birth control!”)

    The cost? $1200 a month. The deductible? $10k. EACH. So you do the math.

  8. That’s right. What we need is social capital programs in place that allows workers to gain property rights on capital itself, but in ways that are not coercively induced against the rights of existing property owners.

    Capital Homesteading and other Binary Economic programs are the best means to achieve this that I’ve heard so far.

  9. The fact that you have to ask that question speak volumes of your education in history….or rather the lack thereof.

  10. Your repugnant theories are not supported by any data, and are actually merely racist tropes. If you are anything other than a troll bot I really wish you would spend 5 minutes doing some honest research into any of the ridiculous notions you are pushing.

    There are Marxists behind every tree! Only Christians are hard working, the rest are godless commies! The immigrants are takin’ our jobs! They’re rapists and murderers! MAGA!

  11. It was a lot easier to dismiss low mobility as laziness back in the days when anybody who was willing to work hard could rise, or at least provide for a family. But it’s no longer a question of just working hard; you need marketable skills, and the credentials to prove those skills out. (The latter is insane, BTW.) This is only going to get worse as automation takes hold harder.

    Up until the end of the Great Recession, I was firmly in the camp that assumed that a minimalist approach to income security was the way to go. Since then, though, I’ve kinda changed my tune.

    I take an extremely dim view of proposals to educate our way out of the problem, because education at scale, for a reasonable price, is a technology that we don’t possess. This is R&D spending that ought to have a very high rate of return, and I support it. But waving your hands and saying that education will solve the problem is a lot like waving your hands and saying that solar panels will solve the climate change problem. Just because you know that there’s a problem doesn’t mean you know how to solve it.

    And of course the rate of automation handily outstrips the rate of improvement in pedagogy.

    Best I can think of right now is spending enough on income security that people aren’t miserable, and they at least have the option of bringing up their kids in a semi-decent environment. It’s really expensive, though, and fraught with moral hazard.

  12. “…plans to address this ever-so-important concern which requires that THEY have control over whatever it is they’re complaining about…”

    What form do you envision this control taking, surly you’re not thinking about the usual tax rates? Perhaps a maximum of x amount everyone is allowed to have, or a 100% rate after you’re worth x amount?

    You think it’s not possible to alter society to a form that works better for most without it being Chavez or Orwell like?

  13. Often what’s pushed out as ‘good policy’ is diametrically opposite to the result.

    Ever read “Animal Farm” by Orwell? Were the pigs ‘good’, or ‘bad’? Their policies sure sounded good… just like Chavez’s did in Venezuela.

    And it can work… for a while. Until it doesn’t.

    At this point, whenever someone starts screaming about social mobility or income inequality and has plans to address this ever-so-important concern which requires that THEY have control over whatever it is they’re complaining about, I’m pretty sure that control isn’t going to be a temporary thing – and the end results will likely be a lot worse than the actual problem in the first place.

    Tell me you want ‘income equality’ and I’m going to assume you want control over everyone’s money.

    So… yeah. Limit wealth – and you limit opportunity.

  14. There is a moral/spiritual dimension to inequality. In America success was highly correlated with the work ethic which had a strong Christian subtext. Hard work was not just material rewarding but correlated to the worship of God. The Protestant variations of Christianity also had an strong believe in equality before God. There was also a belief that you were responsible for your fate in this life and the after life. Work was important, Family was important and Faith was important. Each reinforced each other. Marxists critics of America railed against this “American Exceptionalism” and sought to destroy it. They have succeeded to a remarkable degree. The Black Family has been virtually destroyed replaced by single mothers in “concubinage” with Uncle Sam. Legal immigrants are resistant to this trend at least for the 1st generation. Illegal immigrants are a mixed bag. Some work very hard but they compete for the same jobs (and undercut wages) that the native born “underclass” complete for. On the other hand illegal aliens are not shy about accepting welfare and committing crime. In such a toxic moral environment it is small wonder that education, ambition and hard work to get ahead are passe. I’m afraid “Leave It To Beaver” has left the building and won’t be back until a lot of people rediscover that moral sense that was lost.

  15. It’s kind of a tautology given the meanings of “limit” and “wealth”.

    But it’s also a nonsequiteur given the article he is responding to.

  16. Easily viewed in the “stealth red-lining” in American suburbs mandating that new homes have a minimum square footage automatically pricing entire zip codes out of ownership reach for all but a select few in order to create affluent microcosms with fabulous schools which disadvantaged students who tend to have greater social problems and costs will never see unless delivering pizza.

  17. Is it Nature or Nurture? Children may pick work similar to their parents based on their native abilities. The USA is like Brave New World, except an underclass is not as useful.

  18. Look at the USSR. Equality, comrade! All were equal, though some were certainly more equal than others.

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