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A Broken Social Elevator? How to Promote Social Mobility

image of A Broken Social Elevator? How to Promote Social Mobility

This report provides new evidence on social mobility in the context of increased inequalities of income and opportunities in OECD and selected emerging economies. It covers the aspects of both social mobility between parents and children and of personal income mobility over the life course, and their drivers. The report shows that social mobility from parents to offspring is low across the different dimensions of earnings, education, occupation and health, and that the same prevails for personal income mobility over the life course. There is in particular a lack of mobility at the bottom and at the top of the social ladder – with “sticky floors” preventing upward mobility for many and “sticky ceilings” associated with opportunity hoarding at the top. The lack of social mobility has economic, societal and political consequences. This report shows that there is space for policies to make societies more mobile and protect households from adverse income shocks. It discusses the options and measures that policy makers can consider how to improve social mobility across and within generations.

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Foreword

The OECD has been at the forefront of documenting the rise of inequality for several decades. The data paint a stark picture: the average disposable income of the richest 10% of the population is now around nine and a half times that of the poorest 10% across the OECD, up from seven times 25 years ago. Wealth inequality is even more pronounced, with the top 10% holding half of total wealth, while the bottom 40% holds only 3%. The financial crisis reinforced these trends, but inequalities still increased and the benefits of growth still mainly benefited the top of the income distribution in OECD countries even during the highest periods of global economic expansion before 2008. In many emerging and developing countries, inequalities remain large despite significant poverty reduction.

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