FEATURE STORY November 28, 2018

A Lack of Mobility Undermines the Aspirations of Millions and May Threaten Stability and Growth

MULTIMEDIA

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STORY HIGHLIGHTS

  • The new Global Database on Intergenerational Mobility (GDIM) has vastly expanded coverage of intergenerational mobility to 148 economies representing 96 percent of the world’s population.
  • Data from the GDIM indicate that intergenerational mobility is significantly lower in developing economies than in high-income economies, and progress has stalled for the most recent generations covered by the database.
  • A number of developing countries—including Egypt and Indonesia—have managed to outperform their peers, suggesting that the right policies can help create opportunity for disadvantaged families.

The aspiration for a better life for one’s children is universal, but in many countries a person’s fate is largely determined by circumstances at birth, according to an unprecedented data collection effort by the World Bank. A lack of mobility from one generation to the next means that socioeconomically disadvantaged children too often struggle to climb up the ladder of education and income.

“Highly immobile societies permanently lock the poor into last place,” said Asli Demirguc-Kunt, Director of Research at the World Bank. “Not only is this unfair, it is a vast waste of potential talent that threatens long-term growth and social stability.”

Until recently, data on intergenerational mobility was spotty, making it difficult to identify how circumstances at birth influence life outcomes. Estimates of intergenerational mobility were only available for 42 economies. The launch of the Global Database on Intergenerational Mobility earlier this year—alongside the companion report Fair Progress? Economic Mobility across Generations around the World—represents a sea change, with coverage of 148 economies representing 96 percent of the world’s population.

Roy van der Weide, a Senior Economist at the World Bank and manager of the GDIM, provided a deep dive into the insights made possible by the data at a Policy Research Talk. He explained that the database contains measures of intergenerational educational mobility across five cohorts—those born in each decade from the 1940s through the 1980s. Van der Weide distinguished between two types of mobility. Absolute intergenerational mobility measures whether a child exceeded the education of her most educated parent. Relative intergenerational mobility measures the degree to which a child’s educational achievement is independent of her parent’s level of education. Together they provide a lens to understand the degree of opportunity and equity in a society.

Both measures tell a similarly disheartening story: mobility is low around the world, but particularly so in developing economies. While absolute mobility in developing countries slightly improved between 1940 and 1960, it has stalled since then, with fewer than half of adults born in the 1980s attaining a level of education that exceeds their parents’. Absolute mobility is particularly low in African economies, where on average only 35 percent of adults born in the 1980s have exceeded their parents’ educational attainments. For high-income economies, this figure is close to 60 percent.

Data on relative mobility paints a similar picture. In developing economies relative mobility improved modestly between the generations born in the 1940s and 1960s but has stagnated since, suggesting that inequality continues to be handed down from generation to generation. Meanwhile, high-income economies have seen significant improvements between the generations of the 1940s and 1980s.

While educational attainment is an important aspect of mobility, it is not the only one. Van der Weide also highlighted estimates of intergenerational income mobility for the 75 economies for which data are available in the GDIM. Although coverage of income mobility is more limited than education, it tells a very similar story: income mobility is much more limited in developing economies. In fact, in the Middle East and Latin America, income mobility is even more limited than educational mobility, as unequal access to labor markets serves as yet another barrier to those who are already disadvantaged.   

Yet there are some bright spots in the data. Daughters are rapidly catching up with sons in terms of upward mobility in developing countries and have already exceeded sons in high-income economies. Over 60 percent of daughters born in the 1980s in high-income economies exceeded their parent’s educational attainments, while only just over half of sons did so.

Some populous developing countries also managed to outperform the general trends. For example, only 30 percent of Egyptians born in the 1940s exceeded their parents’ educational attainment, but that figure rose to over 70 percent for those born in the 1980s. Indonesia achieved a very similar improvement over the same period.

“Governments can play a proactive role in compensating for differences in individual and family starting points,” said van der Weide. “Ideally, public investments should focus on the earliest stages of life, as gaps emerging early in life are difficult and costly to offset later.”


"Governments can play a proactive role in compensating for differences in individual and family starting points. Ideally, public investments should focus on the earliest stages of life, as gaps emerging early in life are difficult and costly to offset later."
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Roy van der Weide
Senior Economist

Some of the key areas where governments can make a difference in early life are investing in maternal health, food supplementation programs, access to clean drinking water, and health care.

Governments can help equalize opportunity later in the life cycle by not only investing adequately in public education but ensuring access to a quality education for disadvantaged groups. Data from the GDIM database points to higher teacher-student ratios in primary education as a contributor to greater mobility.

Supporting high aspirations can also help individuals and societies break through barriers to mobility. Research in Mexico and India has shown that high aspirations lead youth to invest more time and effort in their education.

“We need to pay much more attention to human capital,” said Jaime Saavedra, Senior Director of Education at the World Bank. “When economists consider the growth prospects of a country, they look to the rate of investment—but just for physical capital. We need to add human capital to the equation.”

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The GDIM and the accompanying report Fair Progress? Economic Mobility across Generations around the World are a joint undertaking of the World Bank’s Development Research Group and the Poverty and Equity Global Practice.



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