Social Mobility

Tamuno-omie H. Aminadoki
Laura Chalmers
Steve Gin
Simon Pelletier
Introduction

Definition
Types
Contributing Factors
Policy Implications

What is Social Mobility?
Social Mobility refers to the ability of people
to move through the distribution of income
over time. (Tresch Example 5.1.)
People get rewarded for intelligence and
skill
People get rewarded for their efforts
The American Dream
American Dream - The Reality
Coming from a wealthy family is essential
or very important to getting ahead
Income differences in the US are too large
It is the responsibility of government to
reduce differences in income

Factors that Enable Social Mobility
Pierre Bourdieu, a 20th century french
sociologist defined three types of capital.
Economic Capital
Social Capital
Cultural Capital
Economic Capital
Economic capital in this context does not
mean the standard risk capital associated
with firms in economics.
Instead this refers to the financial resources
of the individual.
Social Capital
Social Capital is the idea that social networks
not only have value in utility but have an
economic value. The amounts of each type
of capital you have influence your ability to
change all your types of capitals.
Cultural Capital
Cultural capital represents your skills, and
education. In Economics we refer to this as
Human Capital.
Head-Start Assets
Head-Start Assets are what we refer to in
Economics as Endowments. Your ability to
change your situation from this given assets
is Social Mobility. Using Bourdieus
definitions we associate social mobility with
more changes in income.
Intra-Generational Mobility
Change of social or economic status over
ones own lifetime.
Inter-Generational Mobility
Comparison of economic status between
child and parent. It shows what portion of
children move into a different income
bracket than their parents.
Absolute Income Mobility
Measure of living standards within a society.
Often a percentage of individuals with a
higher income than their parents.
This is Non Zero-sum.
Relative Income Mobility
The likelihood with which one can move into
a higher quintile than ones parents.
Zero-sum situation.
Comparing Social Mobility Between Developed
Countries
The Great Gatsby Curve.
Empirical Evidence on Social Mobility in US
2002 Quintile
1968 Quintiles 1st Quintile 2nd Quintile

3rd Quintile

4th Quintile

5th Quintile

Total
1st Quintile 34.2 23.9 24.3 10.1 7.6 100
2nd Quintile 19.8 25.4 25.7 16.1 13.1 100
3rd Quintile

12.1 20.4 16.5 26.6 24.3 100
4th Quintile

12.9 15.6 19.4 25.5 26.6 100
5th Quintile

21.0 14.4 13.5 21.6 29.5 100
Total 100 100 100 100 100 100
Why Social Mobility?
Two sides to social mobility: Upward mobility
and Downward mobility.
In order to move up the income distribution
we must knock someone down.
On Race
The most detrimental racial divide in the U.S. today is arguably in
social mobility. This is, for example, with respect to the
opportunity gap between a child born white, and a child born black.

Racial gaps in education, employment and wealth reflect the
disproportionate representation of black families at the bottom of
the income scale.
On Race cont.
The table below, on a 2012 data by the The Pew Charitable Trusts,
shows that black rates of upward social mobility are lower.

Black children are more likely to be born into poverty than white
children.

More than half of black adults raised at the bottom of the income scale
remain stuck there as adults, compared to a third of whites:

On Race cont.
Education
Plays a major role in determining social mobility.
It facilitates movement up the ladder suggesting that
more and better education within a nation will increase
economic mobility.

Education
Education can have a negative impact by being a barrier
to entry through high tuition costs and extreme
competition.
Education requirements have increased in the last
decade and may hinder the role of education as a tool
for economic mobility.

Women and Men
Women in their 30s have made significant gains in
income over the last 40 years, with income increasing
almost fourfold. While mens income has increased very
little.
The majority of the increase in the income of women
has come from the increased employment rate of
women. Thus much of the upward mobility of women is
due to a greater share of them in the work force.
Mobility and Redistribution
The Prospect of Upward Mobility (POUM) Hypothesis
explains why some poor and working class voters do not
support efforts by government to redistribute wealth
through higher tax rates: they take into account the
fact that they, or their children, may move up in the
income distribution and therefore be hurt by such
policies
Mobility and Redistribution
The POUM hypothesis relies on three key assumptions:
1. Policies enacted in the present will endure into and
impact the future
2. Poorer works are not too risk averse
3. Poor workers must have an optimistic view of their
future, as they expect to go from poorer than
average to richer than average
Questions?
Citations
http://www.brookings.edu/blogs/social-mobility-
memos/posts/2013/08/28-social-mobility-race-opportunity-reeves
http://www.youtube.com/watch?v=P-fSgDZHvvw
http://www.princeton.edu/~rbenabou/papers/d8zkmee3.pdf
Lopreato, Joseph and Hazelrigg, Lawrence E. (December 1970).
"Intragenerational versus Intergenerational Mobility in Relation to
Sociopolitical Attitudes". Social Forces (University of North Carolina
Press) 49 (2): 200210
The Great Gatsby Curve Paul Krugman| 15 January 2012