Page last updated at 11:26 GMT, Wednesday, 22 July 2009 12:26 UK

Looking for the land of opportunity

Children at a nursery school in Finland
Look up - children in Finland are among the best academic performers the world

If top professions in Britain are tough to break into for disadvantaged children, as former UK minister Alan Milburn's report on social mobility found, is there a land of opportunity that can serve as a beacon? Yes, but it's not the US, argues University of Ottawa professor Miles Corak.

The American Dream promises that aspiration, hard work and individual enterprise will be rewarded with prosperity, regardless of family background.

President Barack Obama, the first black president, epitomises this; but all too often the dream fails to match reality.

The truth is that the US sits with the UK at the bottom of the international league table of social mobility.

Miles Corak compared 12 countries, measuring the link between a child's success in the labour market and the family's economic status. A strong link equates to low social mobility.

Family background has as strong an influence on socio-economic opportunity in the classless United States as it does in the supposedly hidebound class-ridden UK.

In terms of giving children a good start in life and having a fair labour market, both countries probably have much to learn from those at the top of the league table - Finland, Norway and Canada, among others.

A generation ago the UK spent less on the education of its children than most other countries in the Organisation for Economic Co-operation and Development.

This without doubt contributed to the lack of social mobility experienced by today's adults.

Class in the classroom

But Finland spent no more per pupil than the UK; the United States the most.

School financing in the US, based on local property taxes, is a strong force for concentrating advantage across the generations.

More affluent parents in America shop for schools, move neighbourhoods and spend a great deal on private tuition for their children.

This is in sharp contrast to the broad-based and universal structure of the Finnish system.

The Obama daughters get ready for school
Ready for school? Obama has encouraged all children to achieve

The UK has a good deal more in common with the US than it does with Finland, but is increasingly recognising that access to good quality education is a playing field that needs to be levelled.

Reform of school financing does not appear to be a priority for the current US administration.

But President Obama's focus on healthcare - if it is truly reformed in a way that will boost access for poorer children - may well pay dividends in promoting social mobility for the long run.

The point is that what matters is not so much the size of the government's social budget, but the degree to which the dollars, pounds or euros are advantageous to the disadvantaged.

In a similar way, removing labour market inequality also helps social mobility.


If the UK and the US have the lowest degree of social mobility it is not only because poorer children don't get the best start in life, but also because the stakes are higher.

In both countries labour markets are more unequal than elsewhere.

Children are like their parents for all sorts of reasons, some of which are valued by the labour market

The barriers - both implicit and explicit - to entry into particular occupations, sectors and even firms are higher.

Taxes are less progressive and the gap between low and high incomes is greater.

Whether the degree of social mobility is a problem that needs to be addressed by our politicians depends very much upon the underlying causes.

Children are like their parents for all sorts of reasons, some of which are valued by the labour market.

If the reason adult incomes resemble that of their parents has to do with parental values and styles, and instilling motivation, then most of us would also agree there is likely little role for public policy.

But if it also extends to the role of connections, contacts or nepotism most would feel the opposite - that the playing field is not level.

In many advanced economies, most jobs held by young people are found through family and friends, and a good many children will end up working in the same occupation as their parents.

Old boys' network?

Whether it matters or not for social mobility depends upon whether there are other options available to young job seekers, whether the best jobs and occupations are allocated this way, and whether the resulting restrictions lead to excessive incomes.

In Canada - arguably the country whose labour market is closest in structure to the US - about four in 10 young men have worked at some point for the same employer as their fathers.

A significant proportion make careers with the same employer as their father had.


But only at the very top of the income distribution is this excessive, and suggestive of nepotism.

In the US and the UK on the other hand, where all the signs are that to a similar degree, children end up working for the same employer as their parents, the effect on social mobility is much greater.

This is because high-paying jobs are more concentrated within the professions, and the overall level of inequality is higher.

What many of the Nordic countries and Canada have recognised is that the full development of a child's early years - schooling, healthcare, and socialisation - is the first and most necessary prerequisite in developing a socially mobile society.

What they also teach us is that this is only a prerequisite, not a guarantee.

The degree of fairness, openness, and equality in labour markets is also a reason some countries are at the top of the league table, while others languish so much further down.

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