Trends in Absolute Income Mobility in North America and Europe

Authors: Robert Manduca, Maximilian Hell, Adrian Adermon, Jo Blanden, Espen Bratberg, Anne C. Gielen, Hans van Kippersluis, Keun Bok Lee, Stephen Machin, Martin D. Munk, Martin Nybom, Yuri Ostrovsky, Sumaiya Rahman, Outi Sirniö,
Issue: 2021
Themes: ,
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This paper looks at trends in social mobility in eight wealthy countries and finds significant differences between them.

It compares the real incomes of parents and children born between 1960 and 1987, linking the two generations where possible. Where this is not possible, absolute movements between generations are inferred by combining information on moves up and down the income distribution between generations with information on the level of income for the two generations.

The countries studied are Canada, Denmark, Finland, the Netherlands, Norway, Sweden, the United Kingdom, and the United States.

The study finds that in the Netherlands 80 per cent of the younger generation earned more than their parents at age 30 – a high rate of social mobility. The figure for Norway is 75 per cent, while the UK, Finland and Sweden also have high rates of more than 65 per cent.

The United States, Canada and Denmark have all seen declines of around 10 percentage points from their peak upward mobility rates.

The authors conclude that the main driver of trends in social mobility is the distribution of incomes across societies. To achieve higher levels of mobility, countries need strong economic growth and a fairer distribution of incomes.