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Journal Issue: Opportunity in America Volume 16 Number 2 Fall 2006

Intergenerational Social Mobility: The United States in Comparative Perspective
Emily Beller Michael Hout

U.S. Social Mobility Rates in International Comparison

Direct comparisons of intergenerational social mobility in different countries are difficult to make, because both data availability and research methodologies differ from country to country. Until recently it has been hard to compare occupational mobility in the United States with that in other countries because of differences in occupational coding, but new research using comparable coding shows that the United States is at the median in terms of opportunity: lower than the most open nations, such as Sweden, Canada, and Norway; but higher than the more rigid nations, such as West Germany, Ireland, or Portugal. 42 Other research suggests that Italy, France, and Great Britain are among the other societies that now display the lowest comparative mobility rates.43

Recent research attributes these international differences in occupational mobility to two dimensions of educational inequality—the share of adults who attend college and equality of educational opportunity (the strength of the effect of family background on educational attainment).44 Opportunity is much greater among college-educated adults of different class backgrounds than it is among adults with less education. The United States has one of the highest levels of college attendance, but also a relatively low level of equality in overall educational opportunity.

Although the United States occupies a middle ground in international comparisons of occupational mobility, its ranking in terms of income mobility is lower. Both the United States and Great Britain have significantly less economic mobility than Canada, Finland, Sweden, Norway, and possibly Germany; and the United States may be a less economically mobile society than Great Britain.45 Much of the higher intergenerational elasticity in the United States is due to greater income immobility at the top and bottom of the earnings distribution; the mobility of middle earners looks more similar to that in the other countries.46

Two explanations for these international differences in income mobility appear particularly compelling. First, it seems plausible that high income inequality at a given time could cause a high intergenerational persistence of economic status. The United States and Great Britain have high income inequality coupled with low income mobility, whereas Scandinavian countries display the opposite pattern. Canada, however, casts doubt on this explanation, because it has relatively high income inequality coupled with high income mobility.

Second, given the limited ability of low-income parents to invest in their children's education, it is possible that progressive public policies toward education financing could explain why some countries have higher rates of economic mobility. Research shows that differences in education financing alone do not explain mobility differences between countries, but education financing is an important part of the explanation, together with other factors that differ between countries, such as the earnings return to education (how much another year of education increases one's earnings) and the heritability (either genetic or environmental) of income-predictive traits.47

Higher economic returns to education and lower levels of public financing of education decrease intergenerational mobility because when income depends on education, children from low-income families need to go to college to be upwardly mobile. But with less public financing of education, fewer low-income children can go to college. Both factors also increase income inequality at a given time, because lower public financing of education lowers equality of educational opportunity, while higher returns to education increase the earnings gap between more and less educated people. These patterns may explain why most countries either have low income inequality and high income mobility or high income inequality and low income mobility. The economic returns to education are higher in the United States than they are in other countries, which may explain the stronger intergenerational income persistence. The role of heritability also implies that differing degrees of assortative marriage in a country—differing rates of couples from similar economic backgrounds marrying—will affect intergenerational mobility. Marital sorting increases intergenerational inequality.48