On the empirics of social mobility: A macroeconomic approach

Abstract

What are the causes of social mobility in a society? Whereas this question is of great interest for both researchers and policymakers, empirical studies concerning cross-country evidence usually suffer from small sample biases as intergenerational income elasticities are only available for a small number of countries. In this paper, we provide two measures based on widely available macro data enabling the estimation of social mobility for a large number of countries. Based on these measures we empirically explore the determinants of cross-country differences in mobility. It turns out that particularly less segregation, a good family environment, inspiring cognitive brain stimulation in early childhood education, high rates of employment, good opportunities to catch up to the average human capital endowment, low variations in school quality and a high amount of social capital foster social mobility. We further find that the "Great Gatsby Curve" is much less pronounced when analyzing the relationship between inequality and mobility in a large sample of countries.