A. Overall Global Findings
How to foster social mobility is a question that economies will have to contend with as a key economic imperative in the 2020s. By benchmarking the level of social mobility across 82 economies, the Global Social Mobility Index can point towards areas for improvement and help respond to critical questions about the drivers of social mobility in today’s economic, technological and social context. This section distils the findings from the inaugural edition of the index.
Most economies still need to bridge their social mobility gap.
The countries that provide their populations with the most equally shared opportunities are mostly Nordic (Finland, Norway, Sweden, Denmark and Iceland). Despite high levels of absolute social mobility, developing economies still lack the ability to equally share those opportunities across their population. Countries which promote the ‘stakeholder’ model tend to perform better than countries which have a focus on shareholder value maximization. The existence of pockets of over- and under-performance in each region suggests that there is little determinism and proactive efforts can enhance the ability of economies to foster social mobility. Figure 7 illustrates the range of scores for each pillar for the countries in this year’s index.
Figure 7: Distribution of Global Social Mobility Index pillar scores
Source: World Economic Forum.
There are deep divides between countries when it comes to social mobility.
Denmark (with a score of 85.2), Norway (83.6), Finland (83.6), Sweden (83.5) and Iceland (82.7) are the closest economies to the ideal state, as described by the concepts included in the Global Social Mobility Index (GSMI). They combine access, quality and equity in education, at the same time as providing work opportunities and good working conditions, while also providing quality social protection and inclusive institutions.
The GSMI reflects this growing complexity in policy prioritization by equally weighting each of the 10 pillars of the index; regardless of a country’s stage of development, any pillar can be considered a potential priority. This is supported by the GSMI results: a country’s overall level of social mobility depends to a large extent on the country’s performance on the relatively basic drivers of social mobility.
The social mobility gap runs deep across regions (Figure 8). Europe is home to 17 of the top 20 economies ranked in the index. There are only two from Asia Pacific (Japan and Australia) and one from North America (Canada). Other regions lag significantly behind—particularly Sub-Saharan Africa, which has an average score of 38.4, and includes five of the bottom 10 countries in the rankings. Additionally, regional averages conceal vast disparities within them.
Figure 8: The state of global social mobility in 2019
Average Social Mobility Index score, 0-100
Source: World Economic Forum.
Analysing the global pillar averages can help identify areas of improvement for many economies. A number of countries fail at providing fair wages; the global average of the Fair Wages pillar is 52.5, the lowest average among all pillars of the index. Incidence of low pay remains high among several countries, reducing both relative mobility within an economy and unlikely to support growth, investment and competitiveness strategies in the new economy. The average Social Protection score is 58.2, which highlights deficiencies in coverage and limited funding of social safety mechanisms across several countries covered in our ranking. Another pillar where improvement is needed across all countries is Lifelong Learning, with an average score of 57.0. The percentage of firms offering formal training is still low and improving access to training for unemployed workers is a crucial tool which will be instrumental in upskilling and reskilling workers. As highlighted by employers surveyed in the World Economic Forum’s most recent Future of Jobs Report, by 2022 alone, no less than 54% of all employees will require significant reskilling and upskilling.
The Fourth Industrial Revolution and the ongoing and future disruption to labour markets will likely compound those differences in levels of social mobility for countries that are unprepared to leverage new opportunities. This may result in a further polarized society, and increasingly segregate workforces into “low-skill/low-pay” and “high-skill/high pay” groups, which could exacerbate inequalities and social tensions. Governments must play a more proactive role in order to level the playing field for all their citizens, regardless of their socio-economic background.
In addition, the overall, global results of the GSMI have a strong correlation with levels of inequality of opportunity as modelled by the World Bank. This highlights the ability for this index to capture the drivers of equally shared opportunities across different countries (Figure 9).
Figure 9: Correlation between Inequality of Opportunity and Global Social Mobility Index
Source: World Economic Forum and The World Database on Equality of Opportunity and Social Mobility.
The Social Mobility Report Great Gatsby curve.
The GSMI also displays very similar dynamics to the Great Gatsby curve, which looks at the correlation between intergenerational income elasticity and GINI. As suggested earlier in this report, levels of social mobility and income inequality are deeply interconnected. In replacing intergenerational income elasticity with overall GSMI scores, the results reveal a similar correlation in between those circularly correlated factors (Figure 10). GSMI results also reveal that there are only a handful of countries with the right conditions to foster social mobility. In contrast with the results of the World Economic Forum’s Global Competitive Index (GCI), one can observe that several countries have focused on improving their competitiveness but haven’t prioritized providing everyone with a fair opportunity to contribute, regardless of their socio-economic background.
Figure 10: Global Social Mobility Index results vs Gini for G20 countries
Sources: Standardized World Income Inequality Database (SWIID) and World Economic Forum.
Note: Gini data is 2017 or latest available. Countries included: G20 and top 3 countries in the Global Social Mobility index.
The promise of leveraging technology for social mobility leapfrogging remains largely unfulfilled.
Analysis of the GSMI makes clear that, in many countries, the root cause of low social mobility is related to economic development issues that go beyond income—namely, quality of and access to education, access to work, poor working conditions and health disparities. Digital leapfrogging will not happen unless these issues are addressed decisively. However, technology could in the future play the role of a powerful equalizer by lowering barriers to entry to knowledge.
Social mobility is closely correlated with life satisfactions.
As illustrated by Figure 11, providing further relative social mobility to individuals is conducive to more productivity of workers as well as increased perception of life satisfaction. By improving social mobility, economies can improve life satisfaction of its citizens, but also increase productivity. A growing body of literature also suggests that there is a positive correlation between life satisfaction and productivity of workers.50
Figure 11: Global Social Mobility Index vs World Happiness Index
Source: United Nations Sustainable Development Solutions Network, World Economic Forum.
Fostering social mobility requires a holistic strategy that most economies have yet to master.
Achieving higher levels of social mobility needs to be perceived as a critical policy goal. So far one of the difficulties in fostering social mobility has been the difficulty to find appropriate KPIs (Key Performance Indicators) to address the breadth of the issue. As mentioned earlier, data on intergenerational social mobility often comes with large time lags that make it difficult to assess short-term success of national policies in fostering social mobility. The report’s Conclusion offers policy recommendations and highlights existing policies that have been successful at alleviating poverty and fostering social mobility.
B. Selected Country Analysis
Australia ranks 16th in the overall index with an overall score of 75.1. Its highest scores are on the Technology Access (88.7), Health (87.4) and Inclusive Institutions (81.9) pillars. Its education system has a low pupil-to-teacher ratio across its pre-primary, primary and upper secondary schools, and a high pre-school enrolment ratio. Despite relatively low unemployment levels for workers with advanced and intermediate education, unemployment for workers with basic education stands at 8.6%, which could be improved by providing more access to lifelong opportunities.
Brazil ranks 60th globally, with an overall score of 52.1. The country scores 54.2 on the Education Access pillar despite a high preschool enrolment ratio (86.5%), and scores 42.2 on the Education Quality and Equity pillar. Brazil has a high level of children below minimum proficiency by age 10 (46.9%); thus, decreasing pupil-to-teacher ratios in pre-primary, primary and upper secondary education could be a pathway to reducing learning poverty. Brazil also has a high NEET ratio among young adults (24.1%). Additional efforts could be made to decrease unemployment levels among workers with basic (15.3%) and intermediate (14.1%) education. Improving access to lifelong learning opportunities could be conducive to reducing levels of unemployment. With a score of 35.9 on our Fair Wages pillar, the incidence of low pay stands at 21.5%, and 27.4% of workers are in vulnerable employment conditions.
Canada ranks 14th on the overall ranking with a score of 76.1. Canada displays a good performance across a majority of pillars, but specifically on the Health (87.7) Technology Access (84.8), and Education Quality and Equity (82.4) pillars. Despite the country’s success in providing equally shared education opportunities, there is still room for improvement in providing fair work opportunities. Its lowest score is on the Fair Wages pillar (62.7) and is the consequence of a high incidence of low pay (22%) among its working population, among other factors. The level of unemployment among workers with basic education is also above average (12.9%).
With a score 61.5, China ranks 45th on the Global Social Mobility Index. Its highest scores are on the Health (80.5), Technology Access (75.0), and Education Access (72.0) pillars. It performs less well on Education Quality and Equity (63.3). Despite China’s high-quality education in urban centers, a large disparity in terms of education quality remains across its regions, and the country scores low in terms of social diversity within and across its schools (31.9). China also displays low levels of unemployment and has a high score in terms of work opportunities (70.1). However, the Fair Wages pillar (32.0) highlights the disparities in distribution of labour income: the bottom 50% of labour income represents only 12.9% of the top 50% of labour income and the incidence of low pay among the population is still high (21.9%).
Denmark ranks 1st on the index with an overall score of 85.2. The country ranks first on the Social Protection pillar with a score of 89.8 and on the Technology Access pillar with a score of 94.1. Denmark also ranks second globally on the Working Conditions pillar with a score of 82.7 and third on the Fair Wages pillar with a score of 80.7. Denmark combines a high-quality and equitable education system with fair wages as well as good working conditions, combined with a thorough social safety net. An area for improvement could be to improve access to lifelong learning which is the pillar in which Denmark scores the lowest (75.1), and which could also improve employment levels among workers with basic education.
France ranks 12th overall with a score of 76.7. Despite high scores for Social Protection (82.2), Fair Wages (74.9) and Working Conditions (76.6), access to work opportunities remains a central problem in France’s labour market. With high unemployment among people with basic and intermediate education, France’s lowest performance across the index is on the Work Opportunities pillar, where it has a score of 68.4. On the education side, despite very high pre-school enrolment (99.5%), the pupil-to-teacher ratio for pre-school is still high in comparison with its regional peers (21.8). France also suffers from a high NEET ratio (11.07) in comparison with other European countries. More could be done to improve lifelong learning by encouraging companies to offer more training and skills development opportunities to its workers and extend access to active labour market policies.
Germany ranks 11th overall with a score of 78.8. Its highest performances across the index are on the Social Protection (85.4), Work Opportunities (84.0) and the Education Access (85.4) pillars. Despite high education access and quality (with low pupil-to-teacher ratios across pre-primary, primary and secondary education), there is limited variation of student socio-economic status within certain schools. With a score of 59.7 on the Fair Wages pillar, there is room for improvement, perhaps by decreasing the high incidence of low pay across its labour force, which currently stands at 19.3%. Another area where progress could be made is within the Lifelong Learning pillar (69.6) by increasing the availability of training for the unemployed, which could contribute to decreasing the percentage of unemployed among workers with basic education (9.4%).
India ranks 76th on the index with a score of 42.7. Despite a significant decrease in the percentage of people living in absolute poverty, there are several areas for improvement for India to provide more equally shared opportunity to its population. First, because of low life expectancy and a low health access and quality performance, it scores 54.6 on the Health pillar. On the education front, it scores 41.1 on the Education Access pillar and 31.3 on Education Quality and Equity, due to its pupil-to-teacher ratios, which are still very high across pre-primary, primary and secondary levels, among other factors. In terms of work opportunities, India has the second-highest level of workers in vulnerable employment in the ranking (76.2%), behind Saudi Arabia and a low female labour participation rate (29.8% of the male labour participation). Another area where real structural reform needs to take place is in terms of fair wages. Social protection coverage is also very low in comparison with its regional peers, and overall social protection expenditure is very low (2.68% of GDP). The combination of these factors is detrimental to the social mobility of its population.
Indonesia ranks 67th with an overall score of 49.3. Improvements could be made to its Education Access pillar (51.4) by increasing its preschool enrolment (40.5), and to its Education Quality and Equity pillar (54.5) by decreasing the percentage of children below minimum proficiency ratio (33.8%). Indonesia performs well on the Work Opportunities pillar (66.5), with a low level of unemployment across its population, but could improve its score by increasing female labour participation. The country scores fairly low, however, on the Fair Wages pillar with a score of 26.3, due to strong polarization of its labour income share structure, but also because of a high incidence of low pay among its workers (22.2%). Social protection coverage could also be improved; currently only 1.1% of GDP is being spent on social protection. The country also scores 56.2 on the Health pillar, with a Health Access and Quality index score of 44.5.
With a score of 67.4, Italy ranks 34th on the index. Italy’s highest performance is on the Health pillar (90.1). In terms of education access (68.0) and quality and equity (79.1), Italy suffers from a high NEET ratio among young adults (19.2%); and, despite a low pupil-to-teacher ratio, there is a lack of social diversity in its schools. With a score of 40.2 on the Lifelong Learning pillar, there are also limited learning opportunities for workers later in life. Only 12.6% of companies offer formal training and there is limited access to reskilling for the unemployed.
Japan ranks 15th with a score of 76.1. Its highest performances are on the Health (94.2), Technology Access (87.0) and Work Opportunities (82.7) pillars. With only 1% of children below minimum proficiency by age 10, and a high harmonized learning outcome score, it scores 73.0 on the Education Quality and Equity pillar. However, more progress could be made in improving social diversity among its schools. Japan scores 52.0 on the Fair Wages pillar, which the country could improve by decreasing the incidence of low pay among its workers, which currently affects 12.3% of its workers.
Korea, Rep. ranks 25th on the index with a score of 71.4. The pillars on which Korea performs best are Technology Access (92.4) and Health (91.1). The country also has a high preschool enrolment ratio (94.9%), a low level of children below minimum proficiency by age 10 (0.3%), and relatively low pupil-to-teacher ratio across its entire education system. It provides work opportunities for a majority of its population and has a low unemployment rate but has a relatively high level of workers in vulnerable employment (23.4%). Korea does rank lower on the Social Protection pillar (55.4). Social protection coverage could be improved (65.7%), as could its score on the adequacy of guaranteed minimum income benefits (57.7). Its lowest pillar score is on the Fair Wages pillar with a score of 41.7, related to the high incidence of low pay (22.3%) among its workers.
Mexico ranks 58th with a score of 52.6. There is room for improvement in terms of Education Access (61.8)—the country has a high ratio of young adults not in employment or in training (18.4%)—but also when it comes to Education Quality and Equity (39.1) Pupil-to-teacher ratios are still high across pre-primary, primary and upper secondary levels, and 42.5% of children remain below minimum proficiency by age 10. Despite a strong score on the Work Opportunities pillar (74.4), mainly due to low unemployment across its labour force, the ratio of female labour participation remains relatively low. Working Conditions (46.8) could also be enhanced; Mexico has a ratio of 28.2% of workers working more than 48 hours per week, and 26.7% of labourers work in vulnerable employment sectors. Social protection could also be improved by increasing the effective social protection coverage, which currently only covers 50.3% of the workforce. Finally, with a score of 37.1 on the Fair Wages pillar, Mexico could strive to decrease the incidence of low pay, which is currently at 16.1% of its workforce.
The Russian Federation ranks 39th on the index with a score of 64.7. The country scores 70.4 on the Education Access pillar, with a high preschool enrolment ratio of 85%, despite a high percentage of young adults not in employment or in training (12.4%). In terms of Education Quality and Equity, the Russian Federation scores 75.0 because of its low level of children below minimum proficiency by age 10 (0.9%) despite persistently high pupil-to-teacher ratios in primary school (21.1%). The Russian Federation has low levels of unemployment across all workers with intermediate/advanced education, but unemployment among workers with basic education remains high (13.5%) and results in a score of 74.0 on the Work Opportunities pillar. This ratio could be improved by enhancing lifelong learning opportunities; on this pillar the Russian Federation scores 46.1, with only 11.8% of firms offering formal training and a limited access to training for the unemployed.
Saudi Arabia ranks 52nd on the global rankings with a score of 57.1. The highest pillar score is on the Technology Access pillar (75.7). Progress remains to be made on the Education Access pillar (53.4), which is mainly due to its low level of preschool enrolment and high level of young adults not in employment or in training (19.7%). Saudi Arabia scores 64.2 on the Education Quality & Equity pillar, due primarily to the high level of children below minimum proficiency by age 10 (36.7%) and a high number of teachers reporting a lack of educational material for disadvantaged students (50.5%). Saudi Arabia’s labour market also suffers from limited female labour participation, and an unemployment level among workers with advanced education of 10.6%. The pillar where the most improvement is needed is Fair Wages (29.6), which includes a polarized income distribution and one of the lowest adjusted labour income shares in our ranking (31.5%).
With a score of 74.6 on the overall index, Singapore ranks 20th, the highest performance among Southeast Asian countries. Singapore ranks within the top 10 globally on the Education Access (83.7) and Education Quality and Equity (85.8) pillars. Improvement could be made by expanding the social diversity within schools. Singapore’s labour market has a low unemployment rate for workers with basic/intermediate and advanced education, which translates into a score of 81.8 on the Work Opportunities pillar. However, there is room for significant improvement on the Fair Wages pillar, in which Singapore score 45.1. The income share of the bottom 50% of the population only represents 25.7% of the labour share of the top 50% of the population.
South Africa ranks 77th with an overall score of 41.4. Healthy life expectancy is only 57.1 years, and its health access and quality index score (26.5) is one of the lowest of the countries featured in the rankings, resulting in a score of 48.1 on the Health pillar. With a score of 26.5, access to education is also a major problem, with 8.4% of children of primary school age out of the education system, and very limited access to pre-school education across the country (only 14.9% of children are enrolled). On the Education Quality and Equity pillar, the average pupil-to-teacher ratio is still very high across its education system. It also suffers from a low score on the Inclusive Institutions pillar (60.8), due to low scores on incidence of corruption (43.0) and on government and public services efficiency (59.6). South Africa suffers from the highest unemployment levels in the rankings, with a rate of 33.3% for citizens who have a basic education, and 28.5% for those with an intermediate education. The country also scores low on the Fair Wages pillar (26.0), and the incidence of low pay is also high, with 32.4% of workers being paid less than two-thirds of the country’s gross median earnings.
Turkey ranks 64th on the global index with a score of 51.3. Despite a low pupil-to-teacher ratio in upper secondary education, progress remains to be made on the Education Access pillar (39.6), mostly due to a high number of young adults not in employment or in training (24.4%), and a low preschool enrolment ratio (32.7%). With a score of 50.1 on the Work Opportunities pillar, access to employment opportunities could also be improved as there are relatively high levels of unemployment across the country’s working population, a low female labour participation score (32.8), more than one-quarter of workers in vulnerable employment (27.8%) and a large percentage of workers working more than 48 hours per week (29.4%).
With a score of 74.4, the United Kingdom ranks 21st on the index. Despite a high score on the Education Access pillar (82.5), it lags behind its regional peers in overall Education Quality and Equity (69.1) because of high pupil-to-teacher ratios (especially in pre-primary education where the ratio is among the highest in the OECD). The United Kingdom has significant disparities in educational quality between schools, and limited social diversity within schools. Despite a high score on social protection access (79.4), one strategy for further improvement could be providing additional active labour market policies which could help the long-term unemployed population gain entry back into regular employment. Another area for improvement concerns the country’s score on the Fair Wages pillar (53.1), where it ranks relatively low in comparison with its European peers, with an incidence of low pay of 19.3%.
The United States ranks 27th on the global index with a score of 70.4. Despite scoring high on the Work Opportunities (83.0) pillar—because of its low unemployment rate—as well as on the Technology Access pillar (90.2), it has the lowest score in the region on the Fair Wages pillar (43.8 against an average of 64.6 for the region). With an incidence of low pay (less than two-thirds of median wages) at 24.9, it has one of the highest incidences of low-paid workers among OECD countries. The lack of effective social protection in the United States also translates into a low score on the Social Protection pillar (61.7). The minimum guaranteed income benefits for a family with two children (where one partner is out of work) is only 20% of median income. The United States could also improve on the Health pillar, where it performs quite poorly compared to peers in its region (75.8) due to a low healthy life expectancy at birth (66.6 years).