The challenge the government is to find out what can be done at a policy level to ensure people can improve their prospects for upwards earnings mobility.
Lee Savage is a research and policy analyst at the Resolution Foundation
On Tuesday, David Willetts, Minister of State for Universities and Science, confirmed the government’s ongoing interest in social mobility with a speech at the Resolution Foundation. The event marked the release of new findings from the Foundation’s work on earnings mobility.
The work is focused on the earnings mobility of two cohorts between the age of 30 and 40, and has already discovered a slight increase in overall mobility in the 2000s compared to the 1990s.
It has also shown that long-range mobility – defined as a move of three or more deciles – rose significantly in the same period, by 22 per cent, albeit from a low starting point).
Yesterday’s new findings dig down deeper, examining the characteristics, from gender to education, occupation, region, and labour market experience, that decide whether people move up or down – or not at all.
Among other findings, the research reveals that men are significantly more likely to move up the earnings ladder than women even after controlling for differences in education. It also finds that those with less than NVQ Level 4 qualifications struggle to make progress compared to their university-educated peers.
For the government, the findings relating to education may carry particular interest. Despite the expansion of higher education that has taken place across decades, the mobility premium associated with NVQ Level 4 qualifications has increased.
In other words, the fact far more people had degrees in 2000 than in 1990 did not lessen the role of a degree as a ladder to higher earnings; on the contrary, the risk of downward mobility for those without a degree increased between the 1990s and 2000s.
As Graph 1 illustrates, other findings show the risk of downward mobility was highest among people working in manufacturing and skilled-trades occupations and highest among professionals, perhaps in part a reflection of the decline of the manufacturing sector and changes in the way technology impacts on the jobs market.
Overall, the results of the research suggest people on low-to-middle incomes continue to face considerable challenges when seeking to progress up the earnings ladder, being less likely to possess the characteristics are associated with greater upwards mobility.
The challenge for Mr Willets and his colleagues now is to find out what can be done at a policy level to ensure this group can still progress in work and improve their prospects for upwards earnings mobility in the future.
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