Is Social Mobility a Key to Prosperity? Analyzing Global Economic Trends

The study by the World Bank and George Washington University examines how intergenerational educational mobility impacts economic growth across 68 countries, revealing that its effects vary by region. While higher education access boosts income in developing nations, stability in educational attainment may benefit advanced economies.

Research by Ivan Torre, Michael Lokshin, and James Foster, is a collaborative effort between the Office of the Chief Economist of the Europe and Central Asia Region at the World Bank and George Washington University, published under the World Bank’s Policy Research Working Paper series, investigates the role of intergenerational educational mobility in shaping long-term economic growth. Using data from 68 countries over two decades, it explores whether societies that allow individuals to move up the academic ladder regardless of their family background experience faster economic development. The common assumption is that greater mobility leads to better economic outcomes, but this research challenges that notion by showing that the effects of mobility vary significantly depending on regional and structural economic factors.

Education, Innovation, and Growth: The Missing Link?

The foundation of the study lies in the well-established idea that technological progress is the main driver of economic development. However, for innovation to thrive, economies need a highly educated and skilled workforce. If access to education is limited by social or economic barriers, growth potential remains untapped. In theory, societies with greater intergenerational educational mobility where parental background has a weaker influence on a child’s education should experience stronger economic growth due to a more efficient allocation of human capital. Yet, reality is more complex. The relationship between mobility and economic development is shaped by numerous factors, including labor market conditions, the quality of education, and institutional stability. This study seeks to untangle these influences and assess how different forms of mobility impact national income levels.

Measuring Mobility: A New Perspective

To conduct their analysis, the researchers compiled data from the Life in Transition Survey (LiTS) and the Global Database on Intergenerational Mobility (GDIM). Traditional mobility indicators such as intergenerational persistence (IP), intergenerational correlation (IC), and absolute mobility metrics were used to assess how parental education levels influence children’s educational attainment. However, a key innovation of this study is the introduction of the oriented mobility gap, a new measurement that captures the extent to which children's education surpasses that of their parents. Unlike existing measures that focus on either persistence or correlation, this novel approach provides a more comprehensive picture of mobility trends and their economic consequences. By comparing various measures across 68 countries from 2000 to 2020, the researchers offer a nuanced perspective on how mobility functions in different economic contexts.

Regional Differences: Why Mobility Works Differently Across the World

One of the most striking findings is the significant variation in the relationship between social mobility and income levels across regions. In Europe and Central Asia, relative mobility indicators, such as intergenerational persistence and correlation, show no clear link to GDP per capita. However, upward mobility in higher education—measuring the likelihood of children attaining a university degree despite their parents lacking one—is positively associated with national income. Interestingly, the oriented mobility gap has a negative correlation with income, suggesting that simply increasing education levels is not enough to drive economic prosperity unless linked to higher education completion.

In Latin America and the Caribbean, a contrasting pattern emerges. Here, higher relative mobility is associated with lower GDP per capita, while higher absolute mobility correlates with greater economic growth. This suggests that while educational outcomes have become more equal across different socioeconomic backgrounds, the region's economic structure does not sufficiently reward education, possibly due to labor market inefficiencies or limited high-skilled job opportunities.

In high-income countries, the study finds a counterintuitive result: lower relative mobility is linked to higher GDP per capita. This implies that in well-developed economies, educational persistence across generations may be more beneficial than high mobility. Economic stability in these nations appears to depend more on continuity in education rather than rapid changes in social status.

In developing regions across Asia and Africa, both absolute and relative mobility indicators show a positive correlation with income. This reinforces the argument that expanding access to education remains one of the most effective strategies for economic growth in these regions. Governments in these countries can benefit significantly from policies that improve both access and quality of education, ensuring that educational gains translate into real economic opportunities.

Policy Lessons: What Works and What Doesn't?

The study carries crucial implications for policymakers worldwide. In high-income nations, strategies that ensure stability in education and labor markets may be more effective than policies that push for extreme social mobility. For developing regions, expanding access to higher education emerges as a key driver of economic growth. However, simply increasing enrollment is not enough; education systems must align with labor market demands to maximize the economic benefits of mobility. Countries should focus on targeted interventions that help lower-income students complete higher education, ensuring that their degrees translate into better job prospects and higher incomes.

Another key takeaway is that mobility alone does not guarantee prosperity. In some cases, high mobility may even coincide with weak economic outcomes if job markets do not reward education adequately. This underscores the need for comprehensive strategies that integrate education policies with broader economic and labor market reforms.

Rethinking Mobility: A More Complex Picture Than Expected

While social mobility is often seen as a universally positive goal, this study challenges the simplistic assumption that more mobility automatically leads to stronger economic growth. Instead, it argues that the effects of mobility depend heavily on the specific economic and institutional context of a country. In regions where growth relies on human capital investments, increasing upward mobility in higher education is crucial. However, in advanced economies, maintaining a degree of continuity in educational attainment may actually contribute to stability.

The research highlights the importance of region-specific policies that account for the unique dynamics of education, labor markets, and economic structures. Rather than treating mobility as a one-size-fits-all solution, policymakers must adopt a more nuanced approach that recognizes the complexities of social and economic development. By refining our understanding of how mobility interacts with economic growth, this study provides valuable insights that can help shape more effective education and economic policies in the years to come.