Social mobility in U.K.

What about social mobility in U.K?

Social mobility refers to doing better or worse in terms of life outcomes than one's parents.

An often-used indicator of social mobility is "intergenerational income elasticity" (IGE), which measures children's dependence on parental income.

The higher the GOI value (closer to 1), the lower the mobility.

And social mobility in the UK is very poor in the international rankings.

Document 1 shows that the United Kingdom performs quite poorly in terms of income mobility compared to other developed countries: Denmark = IEG of 0.15 and United Kingdom = IEG of 0.45.[pic 1]

Document 2, which shows the  Great Gatsby curve, shows that there is a correlation between inequality (Gini coefficient) and the GEI between countries. Countries with lower social mobility often have higher inequality, such as the United Kingdom, which is second to last.[pic 2]

There are several possible reasons for this:

• the combination of intergenerational transmission of education and the significant wage premium for university-level jobs.
• large regional differences in income in the UK
• service sector job growth in the South
• the more progressive tax system in countries with greater social mobility (e.g. Denmark, Finland and Norway).

The UK's Social Mobility Commission announced that last year, only 35% of UK adults believe that everyone has a fair chance to grow in their job on merit. In addition, 46% said that where you end up in society is primarily determined by your background and who were your parents.

[pic 3]

Document 4 shows us that inequality was very high before Covid. In the UK, wealth is more unevenly distributed than income because the Gini index is 35. Indeed, recent data from the ONS shows that the richest 10% of  households own 43% of all wealth in the UK, while the bottom half of the distribution owns less than 10%, which is therefore

Uneven.[pic 4]

In addition, the Covid pandemic has exacerbated the problem of social mobility in the UK. Document 5 tells us that more than half (56%) of the UK population believes that covid has increased social inequality. So covid has had a bigger impact on jobs that have a lower salary.[pic 5]

Document 6 ( right) shows that 35% of people living in the north of England believe that covid has had a greater impact on employment in their area than in other parts of the country, while for the south this percentage is only 17%. And if we look at the impact on education ( Table 6 ,  on the left), 21% of Northerners believe they have experienced more negative consequences during the pandemic, compared to only 8% in the South.[pic 6]

 Document 7 shows that wage growth has been very strong in the UK today and is growing at about 4% per annum.[pic 7]

Document 8 (left) shows that the strong wage growth of the previous year was accompanied by an increase in dispersion. This indicates that some sectors have experienced very strong wage pressures, but not all sectors.

[pic 8] 

We find that the UK has a fairly high minimum wage as it is the eighth highest minimum wage for adults in the 25 OECD countries before Covid. It is thought that this could help reduce wage inequality by benefiting low-paid workers more broadly

In addition, families at the bottom of the income distribution tend to have much lower or no savings (Figure 10 , right).

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