Social mobility: Your great grandparents could define your status

How much does your family background decide your fate? Amid concerns about stagnating social mobility in many developed countries, how long and how deeply inequality stays in place across generations is a crucial debate in economics.

New research published in the journal of Britain’s Royal Economic Society (RES) brings new evidence to the discussion - and argues that the chances of disadvantage being passed down to you from your great-grandparents are high.

Most studies on this issue, authors Sebastian Braun and Jan Stuhler argue, focus on “just two consecutive generations, parents and their children.” They set out what they call “direct evidence on the persistence of social status across up to four generations.”

The pair looked at data from Germany, spanning up to four generations across the 19th and 20th centuries. They found that about 60% of one generation’s “socio-economic prospects” (in areas like “wealth, education or occupational status”) are transmitted to the next.

The findings suggest that the extent to which inequality persists between generations may be underestimated by many studies.

According to an RES release, the majority of previous research “finds that in most developed countries only around 30-40% of socio-economic inequalities are being transmitted from parents to their children – more in particularly immobile countries, such as the United States, and less in others, such as the Nordic countries.”

Many researchers have looked at the extent to which prospects are inherited between parents and children, and then used that to estimate how much they are passed down through multiple generations.

In testing such a model on their data, Braun and Stuhler found that it gave estimates about 40-70% lower than their model, which includes data on previous generations.

But by comparing their data with a different dataset from Sweden, the authors did not find evidence to support one particularly bleak hypothesis: the economist Gregory Clark has suggested that rates of social mobility are not only low, but “constant across countries and time, unaffected by the environment or policy".

Braun and Stuhler, though, found that the rate “varies over cohorts and is not as high as Clark suggests. “Our evidence speaks against a deterministic view of social mobility,” they wrote.

The findings “contribute to a growing body of research studying transmission patterns across more than two generations,” the RES release said. “In the absence of suitable data sources until now, little had been known about the persistence of socio-economic status beyond the traditional parent-child perspective.”

“While more evidence is now becoming available, there is not yet a consensus on how persistent inequality really is, and what the observed pattern tells us about the underlying transmission mechanisms.”

(Picture credit: Pexels)

Josh Lowe
Josh.Lowe@apolitical.co