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Saturday, October 24, 2009

"Increasing the Social Mix"

Why do some countries exhibit more social mobility than others?:

Getting ahead of ourselves, by Peter Browne, Inside Story: Last month, after Barack Obama invoked the American Dream at Wakefield High School in Virginia, Inside Story looked at what the statistics show about social mobility in western countries. ... In France, Italy, Britain and the United States, family background plays a very significant role in determining adult income; in Denmark, Norway, Finland and Canada the effect is much smaller. ... This puts the United States among a group of countries that are regarded as class-bound and stifling of individual initiative.
Our main source was a report by Anna Cristina d’Addio, a researcher in the OECD’s Directorate for Employment, Labour and Social Affairs. Now, two researchers in the organisation’s Economics Department, Orsetta Causa and Asa Johansson, have released a new report... Their broad conclusion is very similar to d’Addio’s. The more equal the socioeconomic and educational backgrounds of children in a given country, the greater the degree of social mobility...
Causa and Johansson identify education as the key factor. “Across European OECD countries covered by the analysis there is a substantial wage premium associated with growing up in a higher-educated family, whereas there is a penalty with growing up in a less-educated family, even after controlling for a number of individual characteristics.”...
But parents’ socioeconomic status obviously plays a vital role in school performance. ... Interestingly, it’s not necessarily only the child’s parents’ status that counts: “In over half of the OECD countries, including all the large continental European ones, students’ cognitive skills are more strongly influenced by the average socioeconomic status of parents of other students in the same school… than by their own parents’ socioeconomic status.”
This leads into what seems to me the most interesting of the report’s findings. According to the authors, the evidence suggests that “increasing the social mix within schools may increase performance of disadvantaged students with neutral or in some cases with positive effects on overall performance. Thus, policies aimed at encouraging such mix in neighborhoods may, therefore, play a role in mitigating inequalities.” This means that policies to encourage students from a range of backgrounds to attend the same schools ... will not only improve the performance of the least able students without lowering average performance, but could increase the overall performance of a classroom or a school. ...
Government policies have added to the problem in some cases, and helped to alleviate it in others, and not necessarily intentionally. Where enrolments in childcare and early childhood education are high, for instance,... students are less bound by their socioeconomic background. On the other hand, grouping students into different programs according to their proficiency correlates ... with less mobility. ...
Causa and Johansson ... see a role for urban planning and housing. “...policies aimed at increasing the social mix in neighbourhoods (for instance, by improving housing quality in deprived areas in order to attract middle-class families) could be instrumental for improving social mobility, especially in countries where the influence of the school socioeconomic environment on student performance is relatively large.”
Finally, two more observations that might be causing consternation among the authors’ colleagues in the OECD Economic Department:
More progressive income taxation and higher short-term unemployment benefits are associated with a looser link between parental background and both teenager’s cognitive skills and wages. This may reflect the tendency of well-targeted redistributive and income support policies to lower cross-sectional income inequality and poverty rates.
Labour market institutions that tend to compress wage distributions, such as a higher degree of unionisation and a greater coverage of collective wage agreements, appear to be associated with a looser link between parental educational achievement and children’s wages.
Causa and Johansson are saying that any measure that reduces inequality will make it easier for individuals to break free of the constraints of their backgrounds. It’s an enormous challenge for the United States and another warning for Australia.

    Posted by on Saturday, October 24, 2009 at 01:19 AM in Economics, Income Distribution | Permalink  TrackBack (0)  Comments (14)

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