Social Mobility: And Its Enemies (Pelican Books)

by Lee Elliot Major

The argument for greater social mobility for Britain has become an economic as well as social one – mirroring the debate in the United States. Studies estimate that modest increases in Britain’s social mobility would lead to an annual increase in the country’s GDP of between 2 and 4 per cent.25 To put these figures into context, a 4 per cent loss in GDP would be suffered in a major recession. In more mobile societies jobs are filled by those with the highest level of potential to perform well in that role, rather than someone who may be less well suited but better connected. Enhanced social mobility could solve Britain’s productivity puzzle. A second way of assessing the economic benefits from improving social mobility exploits the link between mobility and income inequality we charted in the Great Gatsby Curve. If social mobility levels in Britain were improved to those in Canada, for example, its Gini coefficient would be four percentage points lower.26 This would raise GDP per head by 4.4 per cent since we also know one percentage point reduction in the Gini coefficient increases GDP per capita in the short run by 1.1 per cent.27 The benefits from reduced inequality show bigger effects in the long run. Improving social mobility makes for good economic policy. As Nobel Laureate Joseph Stiglitz says, ‘another world is possible’: one where living standards and well-being are higher as a result of greater mobility and lower inequality.28 We will find in the next chapter tha...