Equality with a Happy Bourgoisie.

The Social Democratic Road to Equality Gosta Esping-Andersen

Impoverish the bourgeoisie or enrich the proletariat? Whether or not they adhered to a parliamentary strategy, pre-war socialists remained, albeit with varying degrees of intensity, faithful to the doctrine of socializing the means of production. From Karleby in Sweden to Kautsky in Austria, the prevailing assumption was that genuine equality could only be attained by dispossessing the bourgeoisie. The parliamentary socialists, persuaded as they were of the imminent proletarian majorities, initially viewed socialization as a realistic objective. But historical progress proved them wrong.1 The first socialist government in Sweden constitutes, in fact, a rare historical attempt to dispossess the bourgeoisie democratically (via a taxation scheme). The policy was a miserable failure, not least because it garnered only lukewarm at best support from the working class electorate (Bergstrom, 1988).2 As did the Swedes very swiftly, most social democratic movements that aspired to govern had to redefine their egalitarian agenda. This they did by essentially reversing the target, leaving the bourgeoisie in peace and concentrating instead on enriching the proletariat. Thus emerged the great social democratic reversal. What is to be done translated into the socialization of income flows rather than capital stock. Since the proletarian masses failed to materialize, any realistic claim to political power required broad, cross-class electoral coalitions. Before mid-century this meant championing the cause of the popular rural and urban classes. Thereafter, the challenge was to forge a white collar-blue collar coalition. That said, can genuine equality be achieved by enriching the bottom rungs of the social ladder while leaving the bourgeoisie in peace? This age-old question is what guides my contribution to the Festschrift in honour of Jose Maria Maravall. To arrive at any answer we must, firstly, agree on what is a relevant
Przeworski (1985) provides the single most compelling argument for why the choice in favour of parliamentarism essentially precludes the pursuit of socialism. Eduard Heiman in Germany and Ernst Wigforss in Sweden laid the basis for the proposition that welfare state policies would gradually transform society towards socialism. Of the two, Wigforss was by far the most concrete thinker, arguing in favour of a strategy based on socializing income flows. Korpi (1983) is no doubt the most prominent post-war advocate of this view. 2 Basically the same happened half a century later when both the Danish and Swedish social democrats promoted economic democracy (Esping-Andersen, 1985).
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egalitarian outcome and, secondly, identify the means by which it was attained. So, how did the egalitarian promise evolve over the past half century, and how was it pursued? This is no easy task since social democratic egalitarianism has seen many reincarnations, and its articulation has rarely been very concrete. Empirically I shall focus on the Scandinavian social democracies. Considering their political dominance over most of the post-war era, they are surely the best --- and possibly only test-case we have. But I shall try to hold them up against rival cases. And I shall hone in on one dimension of equality that probably all would agree is central, namely the inter-generational transmission of social class. I shall conclude that, indeed, there is compelling evidence that Scandinavian social democracy has effectively equalized the opportunity structure. But this has almost exclusively been a bottoms-up achievement: life chances have been democratized for working class children, but the relative advantages of the privileged strata remain more or less intact. I argue rather speculatively that these accomplishments are less the result of deliberate strategies than the second-order effect of policies pursued for other objectives. Painting with a very broad brush, one can identify a convergent social democratic reconceptualization emerging in the post-war decades. On one hand, equality became a catch-all phrase, little more than a marketing label for whatever policy they happened to pursue. On the other hand, and somewhat more tangibly, their egalitarian promise came to focus primarily on social citizenship rights -- T.H. Marshalls 3-stage pursuit of citizenship was very influential. For a movement that adhered firmly to the democratic tenets this was both a logical and coherent strategy. In Sweden this translated into the concept of Folkhemmet (the peoples home), thus additionally emphasizing social democracys broad popular identity (Bergstrom, 1988; Esping-Andersen, 1985). Socializing Income Flows In practice, the peoples home that evolved in the early post-war decades was little more than a basic welfare state architecture: old age pensions, unemployment and sickness insurance, social housing, and so forth. But the Scandinavian version did distinguish itself in two important respects. Firstly, it divorced social rights from market status; entitlements became in this respect truly a matter of citizenship. And, as I have once argued, this entailed a non-trivial degree of de-commodification of labour (EspingAndersen, 1985). Secondly, the design was uniquely universalistic, guaranteeing identical entitlements to all, rich or poor.3 These elements of the welfare state proved to be decisive for social democracys future electoral fortunes because, indeed, they helped cement the broad cross-class coalitions that they required. And yet, in the mid-1960s, just as the social democrats proudly proclaimed that the peoples home had been achieved, emerged mounting evidence that the welfare state had not effectively eradicated the kinds of basic inequalities that most citizens actually care about, namely poverty, unemployment, or their childrens

As Baldwin (1985) emphasizes, it would be wrong to equate universalism with social democratic principles. Even as late as the 1950s many Nordic social democratic leaders remained convinced that targeting benefits was a superior way to better the lot of the working man. Rather, universalism was a logical consequence considering that the social democrats needed broad popular coalitions for their reforms.

opportunities for advancement. Thus emerged a new strategy that aimed to equalize living conditions and, more explicitly, to democratize life chances. On hindsight it is easy to see why the peoples home failed on egalitarian terms. Universalistic or not, the welfare state is mainly a piggy-bank, primarily designed as lifetime insurance plans (Barr, 2001). The degree to which it re-allocates the social product across classes or the income distribution is limited, indeed, since the lions share of redistribution occurs across the life cycle. 4 In fact, if we examine the redistributive effect of the welfare state (by the difference in Gini coefficient pre-post redistribution) we see that, in the mid-1960s Sweden was actually less redistributive than Germany (Brandolini and Smeeding, 2009). From the 1960s onward, the social democrats were pressed to deliver real equality. Broadly speaking they took this to mean many things, but three in particular stand out. One was the Meidner plan of redistributing ownership via wage earner funds, i.e. economic democracy. This strategy was, unsurprisingly, most concertedly pursued by the Swedes considering the unusually high degree of capital concentration in Sweden. As soon became apparent, the policy failed utterly in terms of mobilizing much enthusiasm anywhere. The failure of economic democracy was the death-knell of any socialist aspiration to socialize capital ownership (Esping-Andersen, 1985). The second re-definition of the egalitarian promise addressed more explicitly equality of opportunities. Starting with the famous education reforms associated with the Olaf Palme era in Sweden, all three social democracies strove to demolish class barriers throughout the educational pyramid. This was done by eliminating tracking (through upper secondary levels), constructing a comprehensive school system, and by eradicating financial barriers throughout indeed, at the post-secondary level students are paid to attend. As I shall argue, it is possibly the third reformulation of equality that although not actually aimed at class inequalities came to decisively democratize the opportunity structure. Primarily in the name of gender equality, the social democrats began in the 1960s to prioritize family policy and support for womens employment. Within a couple of decades they erected an essentially universal child care system based on and this requires emphasis extraordinarily high quality norms in all respects. In parallel fashion, they introduced very generous parent leave schemes and child allowances. The result was, of course, more gender equality in terms of career opportunities. But this has decisive second-order effects for inequality since maternal employment is a truly effective guarantee against child poverty. In previous work I have estimated that the risk of child poverty falls by a factor of 3-4 when the mother works (Esping-Andersen, 2009; see also Rainwater and Smeeding, 2003). Additionally, high quality pedagogical

Esping-Andersen and Myles (2009) is probably the most up-to-date examination of cross-country redistribution through the welfare state. We conclude overall : 1) that spending accounts for 2/3rds of all net redistribution, and taxation for 1/3rd, which is not surpirisng considering that such a large share of spending goes to zero-income households; 2) that income transfers redsitribute more than services; 3) that spending on early schooling is equalizing while tertiary level spending tends to be quite regressive; 4) that the Nordic social democracies do distinguish themselves in terms of the final egalitarian outcome of redistribution, perhaps primarily because they leave little room for alternative private schemes, and because their heavy servicing bias minimizes need for help to begin with. In other words, social democracy appears to be most effective because it equalizes living conditions pre-redistribution.

programmes during the pre-school years are possibly far more decisive than education reforms in terms of equalizing the opportunity structure.

2. Equalizing Opportunities For decades now, comparative mobility research has consistently pointed to Sweden as an exception to the constant flux thesis (Eriksson and Goldthrope, 1992; Shavit and Blossfeld, 1992). The more up-to-date studies of Richard Breen and his colleagues (2009) confirm the status of Sweden as exceptionally mobile, although they find that several other countries are now exhibiting greater mobility. Since these international comparisons included only Sweden among the Nordic countries, the question remained open whether Denmark and Norway, too, were exceptionally mobile. A few recent studies confirm this (Jaeger and Holm, 2007). In coming to grips with Swedish exceptionalism, the most obvious explanation had to do with the explicit egalitarian thrust in Swedens educational reforms that unfolded from the 1960s onward in Denmark and Norway some years later. As I also show below, there is substantial evidence to show that the reforms in all three countries diminished the class bias in educational attainment. But whether this, in turn, also fostered more intergenerational mobility in terms of class positions is less clear (Erikson and Jonsson, 1996). In fact, the expansion of higher education may very well produce the opposite effect, as happened in Britain (Blanden et.al., 2005). There are, however, features of the Nordic education reforms that both directly and indirectly should equalize opportunities. The elimination of early tracking, the comprehensive school model, and the elimination of financial constraints should all help reduce the class bias, in particular with regard to higher educational levels. The empirical evidence leans towards a positive mobility effect. Bratberg et.al (2005) conclude, for Norway, that the education reforms also helped produce (slightly) more inter-generational income mobility. Both Holmlund (2006) and Holzer (2006) conclude the same for Sweden, but both studies include important riders. Holmlund argues that the positive mobility effect was primarily the indirect and unanticipated consequence of declining assortative marriage brought about by the comprehensive schools. Holzer shows that the mobility dividend obtains for all but children of low educated parents. We are beginning to understand that education reforms may be a necessary but clearly not sufficient precondition for effective life chance equalization. In fact, one of the major insights in recent scholarship is the decisive causal influence of the pre-school years for childrens educational attainment and, more broadly, life chances. This means that family conditions over-determine whatever impact education policies may have. If this is the case and all available evidence suggests this it is clearly erroneous to make any hard and fast distinction between the two kinds of egalitarian objectives in terms of strategy. In fact, equality here and now is a precondition for equality of opportunities (and vice versa). This is in fact explicitly recognized in recent economic models of inter-generational mobility, where the levels of inequality in the parental generation strongly influence the degree of mobility within the child generation (Corak, 2003; Solon, 1999). To illustrate, I

have plotted inter-generational income mobility elasticities against countries Gini coefficients. See Figure 1.

Figure 1. Income Inequality and Intergenerational Income Elasticities*)

Income Inequality and Intergenerational Income Mobility
0,6 0,5 0,4 0,3 0,2 0,1 0
nd en y rw ay dk a e us m an la ad ed ca n no fin fra nc uk

gini elasticity

sw

Source: Gini coefficients are from LIS data; inter-generational income elasticities derive from Corak (2005).

It is immediately evident that the Nordic countries Denmark especially -- are far more mobile than others (except, surprisingly, Canada). And the differences are huge: the Danish parent-child income elasticity is more than three times smaller than the American, British or French. But these summary measures are potentially misleading since it is now well-established that mobility patterns are non-linear. While mobility is fairly extensive in the middleregions of the distribution, there is generally far less up- or down-ward mobility from the very top or from the very bottom. This is a key issue if our aim is to gauge the efficacy of any social democratic egalitarian project. The reason for this has to do with marginal effects of policies. The marginal value of a universal child allowance is far greater for low income families; the same goes for the effect of maternal employment. And as James Heckman and his colleagues have demonstrated, the same logic applies to early childhood programmes (Heckman and Krueger, 2003). In fact, the latter point helps us understand why even the most ambitiously egalitarian education system alone is unlikely to weaken much the impact of social origin on opportunities. As is well-established, class differentials in school preparedness are already manifest when children first enter the education system, and schools are not well equipped to remedy the problem. Not only are later remedial programmes costly, but also not very effective (Heckman and Lochner, 2000). The basic logic is depicted in Heckmans learning-begets-learning model. Those who start strong will, over time, distance themselves from the rest; those who have a poor start will fall ever more behind. And the key point here is that conditions during early childhood are decisive. While the latter argument enjoys very broad scholarly consensus, it is still not clear which conditions that matter most. American research has for decades emphasized the

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role of poverty and of broken families, lone motherhood in particular. There is indeed very strong evidence in favour of adverse poverty and lone mother effects (Mayer, 1997; Biblartz and Raftery, 1999; McLanahan, 2004). But as Mayer (1997) emphasizes, the poverty effect is potentially spurious if, as is likely, the real cause lies in those parental characteristics that, in the first place, explain why they are poor. The latter view lies at the heart of the Heckman thesis, namely that the primary cause of disadvantage in early childhood stems from inadequate cognitive and also non-cognitive stimulus. If living conditions during childhood are decisive there is a ready-made explanation for why Scandinavia excels in terms of equality of opportunity. As we shall see below, the eradication of child poverty is without doubt one of social democracys crowning achievements. If instead it is cognitive stimulus that really matters, the link to social democratic policy is rather more remote. The most likely explanation in this case is that universal high quality pre-school institutions exert a substantial positive marginal effect in favour of deprived children. Since both policies coincide in all three Nordic social democracies, untangling their respective influence is essentially impossible.

Are social democratic achievements endogenous? It is unlikely that social democracy will achieve major equalization unless it has experienced long and durable rule. This is why Denmark, Norway and Sweden are the logical candidates for scrutiny. And in order to ascertain whether social democracy, indeed, is the real agent of change, we should have some idea about when social democratic reforms begin to coagulate into plausible egalitarian outcomes. For all three Nordic cases, social democratic rule came to dominate from the 1930s onward, but it was not really until the 1960s and onwards that social democracy managed effectively to erect the welfare state edifice fully and, equally importantly, to democratize education systems. If early child care and the eradication of child poverty are decisive, we need to move the clock forward to the 1970s and thereafter. But, in order to plausibly attribute outcomes to social democratic rule we need, first of all, to ensure that the links are not spurious. It is possible that equality and social democracy are both endogenous with respect to the peculiarities of the Nordic societies: these societies already nurtured egalitarianism which, in turn, nurtured social democratic success. Put differently, it is possible that the welfare state, egalitarianism, and social democracy are all outcomes of the same historical legacy the real explanation is simply that Scandinavia is special. There is surely a strong case to be made that the Nordic countries were pregnant with social democracy long before its appearance on the political scene. The agrarian question had been settled already in the mid-1800s and, as historians show, a red-green coalition came far more naturally than elsewhere, not only because a large segment of the rural population faced precariousness, but also because nascent industry was relatively smallscale, dispersed geographically and often located in rural areas (Baldwin, 1985; Misgeld et.al., 1988). There is little doubt that the social democratic ascent to power in Scandinavia was made possible by unique social structural features, rarely found

elsewhere. 5 The universalistic design of social policies is, as Baldwin (1985) rightly emphasizes, a logical outcome of Scandinavian history and not really a social democratic achievement. But one can only stretch the endogeneity thesis so far. Would these countries exhibit the same degree of intra- or inter-generational equality that we see today had the social democrats not ruled for half a Century? One way to answer this question is to compare the Nordic countries with others in a pre-social democratic era. To this effect we could focus on two dimensions. One, were the Scandinavian welfare states already more advanced than others, say in the 1930s or, for that matter, in 1960? If so, it would be hard to attribute their achievement solely to social democracy. As it turns out, the answer is no. In terms of social expenditures, the Nordic countries were international laggards until the 1960s even lagging behind the United States (Lindert, 2004; Esping-Andersen, 1990). Two, were social class differentials less accentuated in the Nordic countries than elsewhere, pre-social democracy? Again, the answer tilts in favour of a no. For one, historical evidence suggests that Sweden boasted comparatively very high levels of earnings inequality and wealth concentration at the end of the 19th Century (Bentzel,1952; Gustafsson and Johansson, 2003; Korpi, 1983; Morrison, 2000). What historical data on income distributions we have do not suggest that the Scandinavian countries were distinctly more egalitarian, at least prior to the 1960s. Measured either via top-bottom quintile ratios or Gini coefficients, inequality levels were rather similar to Britain and actually greater than in Germany (Morrison, 2000; Brandolini and Smeeding, 2009). To exemplify, the income share of the Swedish top decile was 39.5% in Sweden in 1935; in France, 36% (in 1929). Moving forward to year 2000 it is evident from all statistics that the Nordic countries boast uniquely low inequality levels. All the evidence suggests that this occurred after the 1960s, and all the evidence suggests also that this surge of equality was primarily achieved by raising the income shares of the bottom quintiles. The relative income shares of the top quintile hardly changed at all. An alternative approach is to compare the class bias in educational attainment across nations and cohorts. Were origin effects as strong in Scandinavia as elsewhere for the pre-social democracy cohorts, i.e. for those born prior to any genuine social democratic accomplishments? And do we find divergence for subsequent cohorts? The IALS data permit such comparisons. In Table 1, I compare Denmark, Norway and Sweden against Germany, the UK and the US, and focus on three birth cohorts: those born in the 1940s (pre-social democracy); those born in the 1950s and early 1960s; and those born after 1970. The latter is the cohort for whom we should expect any major social democracy effects, either in terms of welfare state redistribution and/or in terms of education reforms. In Table 1 I present odds ratios for the likelihood of sons of unskilled fathers completing upper-level secondary education. The data show that for the oldest cohort, social origin effects were slightly weaker in Denmark and Norway than in other countries. But in Sweden the origin effects were actually stronger than in either the UK or US. Table 1. The relative likelihood of attaining upper-secondary education among children of low educated fathers. Comparing three cohorts (Logistic odds ratios)
Some of the mid-Western states in the US, Wisconsin in particular, exhibited rather similar preconditions.
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USA 1970s Cohort .115*** 1950s Cohort .097*** 1940s Cohort .133***

UK .185*** .153*** .162***

Denmark .449** .248*** .213***

Norway .661* .447** .205***

Sweden .320** .164*** .091***

Germany .094*** .067*** .098***

Data source: IALS. Cohort 1 is born after1970; cohort 2, 1955-64; cohort 3, in the 1940s. Controls for cognitive abilities, sex and immigrant status. Significance levels: * = 0.05; ** = 0.01; *** = 0.001 or better.

Table 1 also suggests that equalization, in this case in terms of educational attainment, began with the middle cohort (born 1955-64) but only really took effect for those born after 1970 (the odds double in both Denmark and Sweden). We find no such equalizing trend in Germany, the UK or in the US. In other words, the 1940s cohort faced roughly similarly inegalitarian opportunity structures in all countries. This is no longer the case among the 1970s welfare state generation since the Swedes are three times, and the Danes four times, as likely to attain higher education as are their German or American equivalents. Whether this was produced by the education reforms or by other factors, such as more income equality and less poverty, is of course an open question. Still, the data do add up to a decisive social democracy effect that cannot be attributed to inherent endogeneity.

Asymmetric Equalization As will be recalled equality of condition and of opportunities are functionally interdependent. When we examine more closely the patterns of equalization, two things stand out. Firstly, it would indeed seem to be the case that social democracy has produced genuine equalization of living conditions. Secondly, as already noted above, the process of equalization is rather one-sided: lifting the bottom without touching the top. Let us begin with a cross-sectional view of the income distribution.

Table 2. Top and Bottom quintiles share of Disposable Income and of tax payments Bottoms share Tops share Of disposable Of disposable income income 10 33 9 36 10 34 8 9 8 6 36 37 39 41 Bottoms share Tops share Of taxes Of taxes 6 5 6 3 7 3 2 41 42 41 45 55 50 57

Denmark Norway Sweden Germany France UK US

OECD Income Distribution data (2005)

The bottom quintiles share of national income is slightly greater than elsewhere, but the differences are small (except for the US case). Similarly, the top quintiles share is a few percentage points lower than elsewhere. The overall income distribution is, in other words, more compressed. Yet, we also see that the bottom pays more in taxes than elsewhere and, most interestingly, the top is clearly privileged in terms of taxation compared to all non-social democracies. A quintile based comparison masks, of course, what happens at the extremes. In fact, when we calculate distances in disposable income between the top decile, the median and the bottom, the magnitudes of inequality appear appreciably smaller in Scandinavia than elsewhere. Considering that child poverty in particular is known to have seriously adverse consequences this is obviously a key indicator. Table 3 presents comparative data on the incidence of child poverty, comparing present day societies (ca. 2005) with the past (ca. mid-1970s). From these data we gain a much clearer picture of what are the genuine social democratic achievements as regards inequality of condition. And if we hone in on an exceptionally vulnerable group, namely lone mother families, the differences become all the more accentuated. Again using the LIS data, the Danish lone mother poverty rate has hovered around 7-8% since the 1970s (similarly in Norway and Sweden); in comparison it has jumped from 22 to 33% in Spain, and remains stubbornly around 50% in the US. What perhaps is most salient is the ability of the Nordic social democracies to resist the trend towards heightened child poverty that we find across so many OECD countries, perhaps most spectacularly in the Netherlands and UK.

Table 3. Child Poverty is Especially Decisive. 1970s Denmark Norway Sweden France Germany Italy Spain Netherlands Canada UK US n.a. 4.8 6.4 7.2 4.4 n.a. 12.7 2.7 14.4 6.0 19.3 mid-2000s 3.9 4.9 4.0 7.9 10.7 18.4 17.3 9.1 15.1 14.0 21.2

Data from LIS. I use here the 50% of median adjusted income poverty line.

All this suggests that the main achievement lies in raising the relative position of the bottom substantially while not lowering the relative standing of the privileged much. As to the latter, it would appear that it depends on whether we examine the top broadly or

more narrowly. The top quintile appears not to have suffered much, but the very rich (i.e. the top decile) have lost ground. Now, is income compression and low poverty the product of the welfare state? At first glance, not really. If we ignore pensions, the share of welfare state income transfers that benefit the bottom income quintile is 32-33% in all three Nordic countries which compares unfavourably with a 36% average for all OECD countries. Similarly, the Swedish top-quintile receives 11% of all, which is identical to the OECD average. The real story of Scandinavias more compressed income distribution lies elsewhere, namely in the fact that bottom-end households have greater work-income than in most other countries. And this, in turn, can best be ascribed to the success of social democracy in minimizing unemployment and, more importantly, in maximizing labour supply of women generally and of mothers in particular.6 In other words, whatever egalitarian outcomes Scandinavian social democracy has accomplished in terms of the income distribution are arguably primarily the second-order consequence of labour market policies, collective bargaining, and of their unusually concerted gender-equalization policies. One way to illustrate this is through a simulation exercise. Using ECHP data, if we simulate that Spain were to have Danish levels of female employment, the Spanish Gini would decline by roughly 12 percentage points (Esping-Andersen, 2009). Put differently if, as in most countries, female employment is concentrated within top quintile households, the effect is very inegalitarian. The trick is to maximize female labour supply at the bottom of the social pyramid. 7

Inter-generational mobility revisited

The asymmetric, bottoms-up approach to equal opportunities should, as already Table 1 suggested, become most evident when we examine inter-generational mobility profiles. The advantage of examining trends in class mobility is that we can implicitly control for endogeneity. If, as my previous analyses suggested, Scandinavian mobility patterns presocial democracy looked quite similar to those of other, non-social democratic countries we have some evidence, albeit not causal, for the hypothesis that social democracy does make a difference. We can identify mobility via three kinds of measures. One is to examine the degree to which offsprings income correlates with fathers. A second is to estimate intergenerational correlations of class position. And a third is to focus on origin effects on educational attainment. Since both theory and a substantial body of empirical research argues that final outcomes, be they income or class position, are primarily driven by educational achievement, ones principal focus should be on the latter (Breen and Jonsson, 2005; Breen and Luijkx, 2004). As mentioned, researchers that estimate intergenerational income correlations have now firmly established the presence of nonlinearities (Couch and Lillard, 2004; Jantti et.al., 2006; Bjorklund and Jantti, 2009). The core finding is that parent-child correlations are especially strong at the very top and bottom of the income distribution -- and comparatively weak in the middle. Jantti et.als (2006) study is especially revealing since it shows a similar lack of downward mobility
6 7

To this we should certainly also add the Nordic trade unions success in narrowing wage differentials. The Danish lone mother employment rate is 81% (Esping-Andersen, 2009).

from the very top across many countries, whereas there are truly significant country differences in terms of upward mobility chances for those who come from the bottom. Children from bottom-quintile families in Scandinavia are more than twice as likely to be upwardly mobile as in the US. And, yet, there is no greater degree of downward mobility from the very top in Scandinavia than elsewhere. To illustrate, Jannti et.al. (2006) find that 25 percent of Danish (and Swedish) sons from the lowest quintile end up in the same quintile as adults. This is only 5 percentage points more than what we would have expected from pure random assignment. And it compares very favourably with the US, where 42 percent end up in the same bottom quintile. But inherited privilege at the very top is basically identical in Scandinavia and the US (36 percent of Danish and American sons from the top quintile end up, as adults, in the same top bracket). Of course, these findings do not tell us whether national differences that we observe today were similar in the past. The major shortcoming of identifying social inheritance via parent-child income correlations is that it is de facto impossible to explore historical trends. And this is clearly of pivotal importance if our aim is to uncover policy effects. As I noted above, it is doubtful that the Nordic countries were less class-ridden than elsewhere in the past. The high degree of inter-generational income mobility that we saw in Figure 1 is most likely of relatively recent vintage. One alternative is to examine how parental class position affects sons income attainment across different birth cohorts as did Ermisch and Francesconi (2004). But in order to identify whether any observed change in generational mobility is policy induced and if so by what policies we need to identify to what degree such change is the product of direct effects (origin-offspring correlations) or indirect effects (mediated via educational attainment). To this aim we clearly require very recent data that allow us to include cohorts born both before and after social democracy. The shortcoming of virtually all social mobility studies, so far, is that their youngest cohorts are in fact quite old. Breen et.als. (2009) study utilizes data that are far more recent than those used by Erikson and Goldthorpe (1992) or Shavit and Blossfeld (1992). And, yet, their youngest cohort was born in 195966, which implies that childhood experiences evolved during an era in which the basic building blocks of the welfare state had been erected, but not in the second egalitarianpush phase. In particular, the major educational reforms would have affected this cohort only marginally at best. Nonetheless, the Breen study finds rising mobility across many countries. The new EUSILC panel survey (from 2006) contains an inter-generational module that does permit us to better compare pre- and post- social democracy cohorts. In the following I shall compare two: those born 1945-57 and those born 1968-77. In a first step, I examine how social class origins influence the probability that sons attain tertiary level education. This, of course, presumes having already passed the upper-secondary level. A bi-variate probit estimation is therefore the most suitable in this case. The results, shown in Table 4, focus solely on the estimations for tertiary-level attainment. The second step is to examine how class origins influence class destiny. To identify origins, I use the standard EGP 5-class scheme and hone in on mobility from the top (salariat origins) and from the bottom (unskilled origins). In each case, the reference is

the three middle EGP class origins. 8 The measurement of class destination is wrought with trade-offs. Were we to use the EGP class scheme also for destinies, we face the problem that the youngest cohorts (1968-77) are often still at the early stages of their careers. This means that they are less likely to be found in higher-level managerial or leadership positions simply for reasons of age. For these reasons I prefer to identify destination in terms of earnings quintiles, since the latter are measured exclusively in intra-cohort terms. For the sake of simplicity, I present only mobility matrices that show, respectively, quintile destinations for sons from salariat and unskilled origins.9 Indirect Origin Effects To identify indirect effects, i.e. the influence of social origins on educational attainment, I focus on tertiary-level education. As before, I use the EU-SILC data and hone in on the two extremes: originating from the lowest (i.e. unskilled) and highest (i.e salariat) classes. The middle EGP classes are, collectively, the reference for estimating the coefficients. See Table 4.

Table 4. Origin effects on attaining tertiary-level education (boys). Based on Bivariate Probit estimation Origins: Lowest EGP class 45-57 cohort 64-77 cohort Salariat 45-57 cohort 64-77 cohort Denmark Norway France Italy Spain

-.34** -.11 .66*** .68**

-.42*** -.07 .49** .47**

-.33*** -.39*** .92*** .51***

-.36*** -.17** .63*** .69***

-.45*** -.25*** .86*** .56***

Controls for mothers education, sib-size, economic hardship during childhood,single mother family, and immigrant status. Reference class for analyses are the three middle EGP classes. Note: the bi-variate probit models estimate tertiary and upper-secondary level attainment simulatenously. Table 4 shows only coefficients for tertiary level.

Here the evidence in favour of a social democratic effect appear rather strong. If we begin by examining the old, pre-social democracy cohort, the Nordic countries display strong social origin effects that do not deviate much from other countries except that salariat origins had extraordinarily strong effects in France and Spain. The pattern changes quite evidently for the young cohorts, almost exclusively because, in Scandinavia, unskilled origins now no longer have any statistically significant adverse effect on tertiary education attainment. The disadvantage has evidently weakened in both Italy and Spain; in France it persists. Turning to sons from the salariat class, we note that the relative advantages associated with privileged origins have not abated in either Denmark or Norway while, indeed, they did in both France and Spain but we also note the extraordinarily strong class bias in
The SILC data furnish only 2-digit ISCO coding for fathers occupation which prohibits constructing the more elaborate EGP classification. 9 The results from simple mobility matrices are highly consistent with those obtained from more complex multivariate estimations. See Esping-Andersen and Wagner (forthcoming)
8

these countries for the old cohorts. The upshot is that privileged origins now exert a stronger effect in Denmark than in either France or Spain. A basically similar conclusion emerges if we instead focus on the impact of financial hardship in childhood. In the old, pre-social democratic Nordic cohorts poverty had a strong negative influence on schooling that completely disappears later. In Spain, Italy and France it continues to exert a strong negative influence also for the young cohorts.

Direct Origin Effects As is now well-established in contemporary scholarship, the influence of social origins tends to be far stronger in terms of shaping educational outcomes than in predicting final destinations. This is, at first glance, already evident when one compares the r-square values for origin-education and origin-destiny regressions. Applying more formal decomposition techniques, such as the Sobel-test (Sobel, 1982), confirms this. In another study based on the same data and similar modelling procedures, we apply this technique and find that the relative weight of direct and indirect effects depends very much on the overall strength of the associations (Esping-Andersen and Wagner, 2010). In France, where origin effects are overall quite strong, the indirect effect overwhelms the direct effect. We find basically the same pattern for Italy and Spain. But the opposite is the case in the two Nordic countries where, as we already know, overall origin effects are comparably weak. In Denmark, as in Norway, the direct effect is far stronger than the indirect effect. This is actually what one might expect. As educational attainment becomes increasingly democratized, its role as a social filtering mechanism ought also to weaken. The upshot is that origin effects become, overall, less salient. The influence that origins continue to exert are, as a consequence, primarily related to how parental characteristics steer children into the occupational structure. In Table 5 below I adopt a simple inter-generational mobility matrix approach and examine how sons of, respectively, low EGP and salariat origins are distributed across the five earnings quintiles. The associations are not adjusted for possibly relevant controls and are, therefore, quite similar to those calculated in the Jantti et.al. (2006) study except that I use EGP-class origins rather than parental income.

Table 5. Inter-generational income mobility. A: Income Quintile of Sons from Lowest EGP Origin Class
Sons Income quintile Old Cohort Denmark Norway France Italy Spain

Bottom 3 Middle Top Young Cohort Bottom 3 middle Top

23 63 14

24 60 16

23 63 14

22 62 16

24 63 13

21 64 15

18 67 15

23 64 13

22 60 18

24 62 14

B: Income Quintiles of Sons from Salariat Origins

Sons Income quintile Old Cohort Bottom 3 Middle Top Young Cohort Bottom 3 middle Top

Denmark

Norway

France

Italy

Spain

19 54 25

15 51 34

14 46 40

12 49 39

9 41 50

16 53 31

19 57 24

16 46 38

17 52 31

11 50 39

Table 5 reveals the asymmetric pattern of social levelling a la social democracy. If we first examine sons of the lowest EGP class, the two Nordic countries have achieved a levelling that is not present elsewhere. For the old, pre-social democracy cohorts, the chances of landing in the bottom quintile were quite similar in all countries. When we turn to the young cohorts, we find a significant decline in Scandinavia (most dramatically in Norway), while the distribution is unchanged in France, Italy and Spain. In comparison, Spain stands out as a society in which there is exceptionally little upward mobility from the bottom, a finding that echoes the earlier work of Julio Carabaa (1999). As we would expect, almost all mobility here is between the bottom and the three middle quintiles. Turning to sons of the salariat, we uncover a rather different scenario. For the old cohorts, the likelihood of ending up in the top quintile was far stronger in France, Italy and, especially, in Spain. Here, pre-social democracy Scandinavia (and Denmark in particular) does appear substantially more egalitarian than elsewhere. For the young cohorts we see a clear equalizing trend throughout, most spectacularly in Spain and Norway. But we also see that privileged origins exert a stronger bias in Denmark. In fact, here the likelihood of being in the top quintile has risen by 24 percentage points in comparison to the old cohorts.

These results point, once again, to the rather one-sided mobility effects that ensue from egalitarian social democratic policies at least with regard to the Danish case. Both Denmark and Norway have been quite effective in equalizing opportunities for those who originate at the bottom of the social pyramid. Norway has undoubtedly also accomplished something similar for those from the top. But, ironically, the advantages of privileged origins have strengthened in Denmark while they have clearly weakened elsewhere, producing in a sense cross-national convergence at the top.

What can be concluded? All told, what have we learned? If social democracy has achieved any fundamental egalitarian victories it seems that these have primarily been to raise the bottom relative to the middle. The comparable advantages that the top of the social hierarchies enjoy do not appear to have been weakened at all in Denmark, although in Norway to a degree. Nonetheless, the magnitudes that separate the bottom from the top have been narrowed significantly, and this is surely not a trivial accomplishment. How do we explain the socially skewed road to equality of opportunity? I can think of three, not necessarily mutually exclusive, logics that lurk behind these patterns. They are based on little more than speculation. Firstly, it may be that political constraints operate. The perennial need for political coalition building compelled the social democrats to pursue a selective egalitarian strategy. Roughly speaking, the period from the 1930s to the 1960s was dominated by the red-green alliance; thereafter, social democracys ability to govern rested primarily on a broad wage earner coalition, the core of which were manual workers and public employees. The red-green era produced universalism as the basic cornerstone of welfare state construction; the wage earner coalition became the basis upon which social democrats could effectively pursue full employment policies and, especially, embark upon gender-equalization. Such coalition logics clearly precluded the kind of classegalitarianism of classical socialism. But they were quite adept at producing policies that would reap second-order redistributive effects be it in terms of democratizing access to education, active labour market policy, or supporting working mothers. Hence, comprehensive schools and the abolition of tracking meant that working class kids attained upper-secondary level education on par with the privileged; and, hence, employment intensity came to differ far less across households than in other countries; and, hence, the most vulnerable, like lone mothers could pretty much support themselves. But why would these same coalition logics preclude any inroads into the relative privileges of the top social strata? Did social democracy need to pamper to the rich? Maybe they did not. A second possible explanation is that the top of the social pyramid always finds ways and has the meansto counter any serious egalitarian moves by leapfrogging, so to speak. This is in fact an age old explanation for why welfare state expansion never seemed to diminish the distance between the rich and the rest (Townshend, 1979). This would have been a ready-made explanation were it that the rich opted out of the system via private schools and universities, or via massive tax evasion. Such exit strategies are difficult to identify in the Nordic countries.

This brings me to a third and no less speculative -- explanation. The top can reproduce social distances because, in large part, we are dealing with advantages that cannot be equalized via policy. And I believe that this is more the case today than it was in the past the reason being that privilege today is primarily associated with human capital. We know from mortality research that the social gap in life expectancy is very large and apparently widening: a professional or high level manager will, on average, live 5-6 years longer than a manual worker. The way that pension systems are constructed implies that the net result is hugely regressive. Marriage behaviour is also polarizing, and on several fronts. Marital homogamy is on the rise, especially among the highly educated. This means that the top combines two high earners; the bottom, two low earners (at best), the net result obviously being that total household income differentials widen. Partnerships tend also to be far more stable among the highly educated; divorce and lone parenthood is increasingly concentrated among the low skilled. But perhaps most important are the non-tangible differences in how parents invest in their childrens life chances. The gap in parenting, both in terms of time invested and quality, is widening across the social classes. In particular, we observe that very high educated parents hyperinvest in their childrens life chances. For Denmark, to exemplify, I and Jens Bonke have estimated that the total amount of parenting time is 50 percent greater in a highly educated couple compared to those with only secondary schooling. Social democracy has undoubtedly removed the economic and institutional barriers to educational attainment for working class kids. Class differentials in terms of secondary schooling have effectively disappeared. But we now know that social segregation starts before children even reach school age and that family influences overpower any impact that educational reform may have. This may help explain why equalization ends up an essentially onedimensional affair.

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