Friday, March 26, 2010

OECD on Social Mobility

The Organization for Economic Cooperation and Development (OECD) has a new publication on Economic Policy Reforms. Chapter 5 of that publication (here) compares social mobility - the extent to which people moving up and down the prosperity ladder - in all the OECD countries. Interestingly, and contrary to the conventional wisdom, "[m]obility in earnings, wages and education across generations is low in France, southern European countries, the United Kingdom, and the United States. By contrast, such mobility tends to be higher in Australia, Canada and the Nordic countries."

What are the reasons for this? Among other factors, the OECD finds that "[r]edistributive and income support policies seem to enhance intergenerational social mobility." Presumably, higher inheritance taxes would also be associated with higher levels of social mobility. As a Property Law scholar, I also wonder about the effects of the growth of dynastic trusts (and the decline of the Rule Against Perpetuities) on the relative lack of downward social mobility in the US. 

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