Britain’s barriers to social mobility

Successive governments have promised to address the UK’s barriers to social mobility – to “level up” and turn the country into the “world’s greatest meritocracy”. But the problem remains difficult to solve and is arguably getting worse. Recent research by the Co-operative Group and think tank Demos estimates that a lack of social mobility costs the UK economy up to £19bn a year.

Moreover, previous research on social mobility has ranked the UK behind countries like France, Germany, and Denmark. The pandemic worsened the issue, widening school attainment gaps to levels higher than in the early 2010s and disproportionately impacting poverty and employment levels in the North of England.

How do we define social mobility? The UK’s Social Mobility Commission defines it as: “The link between a person’s occupation or income and the occupation or income of their parents.” Economists typically measure social mobility using a measure called the intergenerational elasticity of income (IGE). A higher IGE implies lower social mobility and a higher persistence of income across generations. Many studies show the UK to have one of the highest levels of IGE in the developed world.

Public policy … has strengthened dependence on the ‘bank of mum and dad’ for economic success

There is no consensus on the causes of the UK’s social mobility problem. Some research suggests that, following the 2008 Great Recession, low interest rates and quantitative easing fuelled asset market inflation, increasing the wealth gap alongside reducing real wages and access to the housing market. This growing wealth divide, as opposed to the income divide alone, worsened social mobility. Last year, the Institute for Fiscal Studies (IFS) found that growing inheritances stemming from this wealth divide will further reduce social mobility.

The UK also has large geographical inequalities, with investment and skilled job creation being concentrated in the South East and London. Public policy surrounding issues like housing has strengthened dependence on the ‘bank of mum and dad’ for economic success.

Broadening access to education is also important

Finally, there are also differences in social mobility by ethnicity. For example, relative mobility, the strength of the link between a child’s occupation and their parents, is more “rigid” among white Britons than ethnic minorities. The issue is therefore extremely complex.

Whilst we may know a lot about social mobility, we know significantly less about how to promote it. While the political conversation surrounding the issue focuses on equity, high social mobility has sizeable economic benefits. It improves labour market matching, improving workers’ productivity. With the UK having experienced over a decade of stagnant labour productivity, this is an exciting prospect.

Most research advocates for tackling geographical inequality through targeted public investment. Broadening access to education is also important. With university education reserved for students with the best A-level grades, investment in apprenticeships schemes and retraining programmes offer another way to increase opportunity. More radical proposals have included raising Inheritance Tax and randomising allocation for university places, beyond a certain grade threshold, to tackle the rise in private A-level tuition. The aforementioned Co-operative Group report also discusses the role of the business world in improving social mobility, through strategies such as creating “inclusive and equitable” recruitment processes.

Overall, however, improvements will not happen overnight. With barriers to social mobility being tied to so many other economic problems, a long, long road lies ahead.