Benchmarking Social Mobility: The Global Social Mobility Index
Low social mobility is both a cause and a consequence of rising inequalities (Figure 5) and has adverse consequences for social cohesion and inclusive growth.26 Inequality of opportunity and inequality of outcomes appear to be causally and circularly correlated. Leading experts on social mobility have noted that the circular nature of this relationship has far-reaching consequences for future generations: “today’s outcomes shape tomorrow’s opportunities: large income gaps between today’s parents are likely to imply bigger gaps in the quality of education, or access to labour market opportunities, among tomorrow’s children and today’s circumstances will clearly affect tomorrow’s outcomes”.27 If nothing is done, economies risk getting locked into a vicious cycle that combines rising inequality and low social mobility (Figure 5).28 To date, studies have analysed social mobility outcomes mostly by comparing the earnings of children to the earnings of their parents. While such analysis has played an important role in spotlighting challenges faced by economies today, this approach has meant that data on intergenerational income mobility only becomes available with significant time lags and thus misses timely insights into progress on social mobility of the current generation. In addition, most academic research has focused on tracking income inequality, obscuring, perhaps, some of the additional dimensions of inequalities that people experience.
Figure 5: The World Economic Forum’s Global Social Mobility Index Framework
Source: World Economic Forum
The central tenet of this index is to focus on drivers of relative social mobility. Using the conceptual framework outlined in this section, the Global Social Mobility Index benchmarks progress on social mobility based on “conversion factors” and enablers of social mobility rather than intergenerational outcomes.29 It applies the latest theory and evidence about the factors currently influencing future social mobility across economies and societies.
The index will enable effective comparisons across regions as well as across generations. It will provide a forward-looking composite indicator which can serve as a basis for time-series analysis that allows economies to track progress and identify priority policy areas. Accordingly, this index is organized around 10 distinct pillars, which can be broken down in four crucial determinants of social mobility. The section below delves deeper in the relationship between these determinants and social mobility. Figure 6 depicts the 10 pillars featured in the index.
Figure 6: Pillars of the Global Social Mobility Index
Pillar 1 Health
The Health pillar measures the ability of countries to provide high-quality healthcare to their populations. Access to high-quality healthcare is a crucial factor which has a lifelong impact on the ability to experience social mobility. The determinants of health throughout and individual’s life cycle start during the early years but can have lifelong consequences. Within countries, the availability of health services can differ widely, and health inequalities can have a direct impact on the ability to access employment.
Those inequalities can also be witnessed in the difference in healthy life expectancy between different wealth quintiles. For example, in the United States, the gap in life expectancy between the richest 1% and poorest 1% of individuals is nearly 15 years for men and 10 years for women.30 Despite an extensive social safety net, France also experiences the same disparities, with a 13-year life expectancy gap between the top and bottom 5% wealth quintiles.31 According to the OECD, across the EU the average life expectancy gap between individuals with a low level of education and those with a high level of education is, on average, six years.32
Several health economists believe that access to high-quality healthcare is not the only cause of the health-wealth gap. One of these rising causes is what Ann Case refers to as “Death of despairs”.33 Many of these factors are related to mental health, suicide or drug addiction. The opioid crisis in the United States is a good example of a health issue that has become a social crisis. According to the Centers for Disease Control and Prevention, which conducted research across the country, between 2007 and 2017 the number of drug-related deaths increased 108% among adults aged 18–34, and suicides increased 35%. Academic research also highlights that individuals who experience downward mobility are also more prone to cause-specific premature death.34 Chronic diseases during youth can have a determinant impact on socio-economic outcomes. For each chronic condition at the age of 16, the probability of being in gainful employment is reduced by five percentage points.35
Low-quality healthcare disproportionately impacts the most disadvantaged and has a lifelong impact on the ability for people to achieve social mobility. We included adolescent birth rate, malnourishment among youth and adolescents (underweight or obese), and an inequality-adjusted measure of healthy life expectancy.
Pillars 2–4 Education (Access, Quality and Equity and Lifelong Learning)
These three pillars—Education Access, Education Quality & Equity, and Lifelong Learning—measure the ability of countries to give access to education and ensure that high-quality education is available throughout life to all its citizens, regardless of their socio-economic backgrounds.
Education and human capital development strategies have traditionally been considered central factors favouring social mobility.36 The lifelong development and deployment of human capital is a critical element of economic growth and social inclusion. Governments should engage in human capital development strategies aimed at tackling the multiple structural problems (such as inadequate school funding in poor areas, low-quality teaching, high student teacher ratios, etc.) which currently prevent children from disadvantaged backgrounds from achieving their educational potential.
The first 1,000 days of a child’s life represent an enormous opportunity as parental capital represents the bedrock of the development of children’s educational attainment and future employment.37 Parental involvement in children’s education can counter-balance the effects of a child’s socio-economic background assuming parents with low income are not held back from contributing their time by structural barriers. It is therefore crucial to provide inclusive family policies as well as ensuring that parents have time to contribute to their children’s development throughout their lifetime.
As highlighted by several academics, early childhood education can yield significantly higher return on investment than investments later in life.38 In recent years, a number of countries have focused their efforts on early childhood education and care as a policy priority in order to: lay the foundations for future education pathways; limit the risk of early school leaving; and favour social integration, personal development and capacity for employment.39 Numerous policy responses and experiments have been carried out all over the world in favour of a fairer and more equal education system to remedy this complex set of obstacles which hamper social mobility.40 These must be expanded and scaled.
In the present context of rapid technological change, it is also critical that the development of human capital is a lifelong endeavour. Since low- and medium-skilled occupations are the most affected by technological changes and prone to automation, it is crucial for economies to look at methods of delivering and incentivizing learning across the lifespan. Education spending by governments is strongly linked to intergenerational educational mobility.41 Underinvestment in access and quality of education systems results in lifelong consequences on the ability to achieve social mobility.
In our Education Access pillar, we included indicators on the level of preschool enrolment among children, the percentage of adolescent and young adults not in education, employment or training, the quality of vocational training, the percentage of out-of-school children, and an inequality adjusted measure of expected years of schooling. In terms of Education Equity and Quality, we included indicators on the percentage of children below minimum proficiency by age 10, pupil-to-teacher ratios in pre-school, primary and upper secondary education. Furthermore, we included indicators on social diversity within schools, the lack of educational material among disadvantaged children, and the quality of education through the harmonized learning outcome measures produced by the World Bank. We also looked at the quality and access of lifelong learning, through measures of the extent of staff training, the availability of training for the unemployed, and the percentage of firms offering formal training.
Pillar 5 Technology Access
The Technology Access pillar measures the level of technology access and adoption among the population. As highlighted in the previous section, enhancing access to education throughout life is crucial to foster social mobility. But the ability to access those opportunities can often be unequal and perpetuate historical inequalities. Access to technology has the potential to act as a further equalizer, by providing information to everyone irrespective of their socio-economic background. Technology has the potential to ignore such distinctions and provide unrestricted access to knowledge. The emergence of online learning has lowered the barriers to learning resources. Alongside formal education structures, online learning is instrumental in providing access to lifelong learning.
This is particularly imperative in the new economy because of the virtuous cycle between adoption of technology and upskilling. New technology adoption drives business growth, new job creation and augmentation of existing jobs, provided it can fully leverage the talents of a motivated and agile workforce who are equipped with future-proof skills to take advantage of new opportunities through continuous retraining and upskilling.42 Similarly, access to technology can vastly expand the earning opportunities available to people by enhancing the market available to them to find roles, deploy their skills or share their assets.
In our Technology Access pillar, we included indicators looking at the percentage of internet users among the population, the quality and penetration of fixed and broadband internet access, the availability of rural electricity in rural areas and the percentage of schools offering internet access to their students.
Pillars 6–8 Fair Work Opportunities
These three pillars—Work Opportunities, Fair Wages, and Working Conditions—measure the ability for economies to provide access to work opportunities, ensure good working conditions and provide fair wages to its citizens regardless, of their education level and socioeconomic background.
Social mobility outcomes are heavily dependent on education, but they are also directly related to labour market factors.43 Skills must be converted into earnings to enable income mobility. Such a process of conversion needs to rely on appropriate labour market factors. For instance, in a number of countries in Africa, the Middle East and Latin America, income mobility has progressed more slowly than education mobility due to labour market obstacles.44
Technology, globalization and the emerging green transition in the global economy are resulting in shifting occupational structures and changes in skill and competency requirements. The occupations of lower- and middle-income individuals are most at risk of automation and adoption of new technologies across various industries will eventually also result in a widespread transformation of almost all currently established job roles.45
In a number of developed economies, a slower growth rate and the severe issue of long-term unemployment and inactivity, especially among the youth, is a consequence of the inability to convert education into a job opportunity—especially for job categories with little ‘social capital’. Across OECD countries, there has been a stagnation in wage increases between 2008–2015 for the bottom 50% of the income distribution.46
A number of labour market dimensions are important to social mobility. School-to-work transitions are crucial, especially for a growing number of NEETs (individuals not in employment, education or training). Measures to help could include apprenticeship programmes combining formal teaching with work practice in companies, specific devices for tackling the training and entry into the labour market of the early school drop-outs. Additionally, equitable access to job opportunities is critical. Obstacles to employment can include ethnicity, age, gender, disability, skills and employment history as well as practices that promote specific socio-economic backgrounds such as for those who have attended elite institutions. These may be further entrenched if new technologies reproduce the patterns of the past and therefore require proactive measures. For the unemployed, sufficient unemployment benefits are needed to prevent a downward economic spiral alongside active labour market policies. Job placement offices and retraining programmes leading to employment are also essential.
The nature of employment contracts also has consequences for social mobility. Though short-term contracts do provide a chance to enter the labour market, having a succession of short-term contracts can hamper an individual’s mobility; permanent contracts are a favourable asset for social mobility.47 Finally, legislation favouring job mobility in the labour market (between sectors or between jobs in the same sector), by providing more security to individuals (through portable rights), is also an effective social mobility incentive.48
In our Work Opportunities pillar, we included indicators measuring the level of unemployment among workers with basic, intermediate and advanced education, as well as the level of unemployment in rural areas, the female labour participation ratio, and the percentage of workers in vulnerable employment. Within our Fair Wages pillar, we featured indicators looking at the incidence of low pay among workers, the adjusted labour income share, the mean income of the bottom 40% as a percentage of mean income, the ratio of the bottom 40% to the top 10% of labour income as well as the ratio of the bottom 50% to the top 50% of labour income,. Finally, in our Working Conditions pillar, we used benchmarks of the level of workers’ rights, collective bargaining coverage, meritocracy at work, labour-employer cooperation, as well as the percentage of workers working longer than 48 hours per week.
Pillars 9–10 Social Protection & Inclusive Institutions
These two pillars—Social Protection and Inclusive Institutions—measure the ability of economies to provide social protection, and inclusive institutions and efficient public services to their population
Evidence suggests that job volatility is poised to increase with shifts in skill needs and might increase the frequency of job changes in one’s career. These social resilience mechanisms measured in these pillars are crucial to help transition from one job to another. They level the playing field between those with high expandable income and those whose lives might be heavily impacted by a change of circumstance. Such mechanisms moderate the changes that those who are already most vulnerable and might be experiencing downward social mobility during times of economic transition. Social protection alongside fair and efficient institutions can mitigate the impact of career transitions on individual’s lives.
These social safety nets contribute to lowering disparities in living standards across specific regions or groups and provide support for job transition to be less damaging to people’s long-term prospects. Across developed economies, today fewer than one-in-three unemployed, and fewer than one-in-four job-seekers have access to unemployment benefits through relevant support in job transitions and reskilling.49 Across economies, the level of social protection is limited in terms of coverage and scope. Many of the most vulnerable workers—those who are self-employed or out of formal labour markets—are currently excluded from social protections.
Our Social Protection pillar includes indicators which measures the effective social protection coverage, the adequacy of guaranteed minimum income benefits, the level of social protection spending as a percentage of gross domestic product and the quality of the social safety net protection. The Inclusive Institutions pillar features indicators benchmarking inclusiveness of institutions, government and public services efficiency, political stability and protection from violence as well as the incidence of corruption.
Institutions are often designed in such a way that they don’t serve everyone equally. An inclusive society must provide fair and equitable access to its justice system and its institutions, and provide safeguards against the persecution of historically excluded groups. Corruption has a high social cost; it enables higher levels of opportunity hoarding, both in terms of access to higher education and access to work opportunities.