Meritocratic Intergenerational Mobility at the Core of Equitable Societies

Thomas Piketty’s Capital in the 21st Century is about societal inequality. But it is also raises questions regarding social mobility. Inequality reduces when people improve their societal placement from one generation to the next. If individuals cannot advance based on their education, work and natural skills, then their societal status is determined by their parents’ and ancestors’ wealth, income and networks. Individual ability and ambition appear as fairer social order and merit-based allocations as more productive from an economic perspective. Inequality persists in immobile societies. Across countries intergenerational mobility is a feature of equal societies as indicated by the 0.56 correlation between inequality and intergenerational wage persistence. Meritocracy and access to education are prerequisites for intergenerational mobility. Gary Becker and Richard Posner therefore recommend governments to provide first-class education and social services to gifted, yet underprivileged children. Social welfare reduces education gaps for students from disadvantaged backgrounds up to 42.9 percentage points. But OECD economists find government-funded higher education and merit-based scholarships do not entirely break down privilege. Intergenerational immobility persists. Parental backgrounds influences student achievement in secondary education up to 63 gradient points in the PISA Science Score. Children of uneducated parents are three times less likely to start tertiary education facing an overall intergenerational persistence climate of 66.7 percentage points. Surprisingly, intergenerational immobility remains around 20-30 percentage points even in countries with anonymous student bodies. Children from academic parents also benefit from a wage premium of up to 20% compared to those growing up in non-academic households with the link between individual and parental earnings ranging from 15 to 50% intergenerational earnings elasticity across OECD countries. People might not escape their parent’s social economic status because societal class creates and molds one’s expectation of one’s success and abilities, Harvard Professor Robert Putnam argues. Living in a society with little merit-based opportunity reinforces low expectation of escape. Education may not make sense, if there is no hope for merit-based mobility. Intergenerational advancement may thus only prosper in the wake of meritocracy, an overlooked prerequisite of societal equality. While economists can improve access to economic market opportunities coupled by institutional policy makers minimizing discrimination, social scientists should focus on how to build societal trust in merit-based intergenerational mobility. Meritocracy as the psychological backbone of a fair society and hopeful trust in intertemporal improvement are key drivers of economic productivity opening an innovative path to a long-term equitable society