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The Welfare Effects of Social Mobility: An Analysis for OECD countries

Justina A. V. Fischer

MPRA Paper from University Library of Munich, Germany

Abstract: The question whether a socially mobile society is conducive to subjective well-being (SWB) has rarely been investigated. This paper fills this gap by analyzing the SWB effects of intergenerational earnings mobility and equality in educational attainment at the societal level. Using socio-demographic information on 44’000 individuals in 30 OECD countries obtained from the World Values Survey 1997-2001, this study shows that living in a socially mobile society is conducive to individual life satisfaction. Differentiating between perceived and actual social mobility, we find that both exert rather independent effects, particularly in their interplay with income inequality. We identify a positive interaction of perceived social mobility that mitigates the overall SWB lowering effect of income inequality. In contrast to expectations, a high degree of actual social mobility yields an overall impact of income inequality that is SWB lowering, while for low social mobility the effect of inequality is positive. Thus, people bear income inequality more easily when they perceive their society as mobile, but also - surprisingly - when their society is actually rather immobile. These interactions hold stronger for pre-transfer than post-transfer income inequality suggesting that government redistribution disentangles the effect of income inequality from that of social mobility. Robustness using a world sample is tested.

Keywords: Social mobility; Happiness; Well-Being; Life satisfaction; Inequality; Voting; Equal opportunities; Fairness; Justice (search for similar items in EconPapers)
JEL-codes: A14 D31 D63 I31 J62 (search for similar items in EconPapers)
Date: 2009-09-02
New Economics Papers: this item is included in nep-hap, nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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