The chances of a child from a poor family enjoying higher wages and better education than their parents is lower in Britain than in other western countries, the OECD says
The Going for Growth report found Britain showed the strongest link between an individual's and their parents' earnings. The higher the bar, the lower earnings mobility across generations. Source: OECD
Children from poor families in Britain have a greater chance of struggling on low incomes than their counterparts in the west's other rich countries, the Organisation for Economic Co-operation and Development (OECD) said today.
Highlighting the UK's lack of social mobility, the Paris-based thinktank said the chances of a young person from a less well-off family enjoying higher wages or getting a higher level of education than their parents was "relatively low".
The findings came in the OECD's latest Going for Growth report, which said the developed world faced a "daunting task" in restoring public finances to health after the most severe recession since the second world war. It stressed the need for stronger financial regulation and structural reform to labour markets in order to lay the foundations for sustained recovery.
"Policy reform can remove obstacles to intergenerational social mobility and thereby promote economic equality of opportunities across individuals," the OECD said.
Labour and the Conservatives have repeatedly clashed recently on whether it is now easier for young people to escape from poverty, and the issue is likely to feature strongly in the election campaign.
The OECD, which has more than 30 developed-country members, said the UK's record – along with a number of other rich countries – was unimpressive. "Mobility in earnings across pairs of fathers and sons is particularly low in France, Italy, the United Kingdom and the United States, while mobility is higher in the Nordic countries, Australia and Canada."
It added that there was a hefty wage premium associated with growing up in a better-educated household and a corresponding penalty for being raised in a less-educated family.
"The premium and penalty are particularly large in southern European countries, as well as in the United Kingdom."
In the UK, the OECD found that 50% of the economic advantage that high-earning fathers have over low-earning fathers is passed on to their sons. By contrast, in Australia, Canada and the Nordic countries, less than 20% of the wage advantage was passed on.
Government ministers are likely to use the report to back policies such as Sure Start, intended to provide help in the earliest years of childhood to poor families, and to the expansion of higher education. The Conservatives say that 13 years of Labour government have resulted in less social mobility than before.
OECD chief economist Pier Carlo Padoan said all governments facing ballooning deficits should seek efficiency gains from public spending, particularly in education and health, and avoid "harmful" labour and capital taxes.
He also said that the response to the crisis has left "new challenges in the form of moral hazard and weak competition" in the financial sector.
"Regulators across the OECD need to step up ongoing efforts to strengthen financial market regulation," he said in the 250-page report.
By: Larry Elliot, Economics editor (Guardian)
Children from poor families in Britain have a greater chance of struggling on low incomes than their counterparts in the west's other rich countries, the Organisation for Economic Co-operation and Development (OECD) said today.
Highlighting the UK's lack of social mobility, the Paris-based thinktank said the chances of a young person from a less well-off family enjoying higher wages or getting a higher level of education than their parents was "relatively low".
The findings came in the OECD's latest Going for Growth report, which said the developed world faced a "daunting task" in restoring public finances to health after the most severe recession since the second world war. It stressed the need for stronger financial regulation and structural reform to labour markets in order to lay the foundations for sustained recovery.
"Policy reform can remove obstacles to intergenerational social mobility and thereby promote economic equality of opportunities across individuals," the OECD said.
Labour and the Conservatives have repeatedly clashed recently on whether it is now easier for young people to escape from poverty, and the issue is likely to feature strongly in the election campaign.
The OECD, which has more than 30 developed-country members, said the UK's record – along with a number of other rich countries – was unimpressive. "Mobility in earnings across pairs of fathers and sons is particularly low in France, Italy, the United Kingdom and the United States, while mobility is higher in the Nordic countries, Australia and Canada."
It added that there was a hefty wage premium associated with growing up in a better-educated household and a corresponding penalty for being raised in a less-educated family.
"The premium and penalty are particularly large in southern European countries, as well as in the United Kingdom."
In the UK, the OECD found that 50% of the economic advantage that high-earning fathers have over low-earning fathers is passed on to their sons. By contrast, in Australia, Canada and the Nordic countries, less than 20% of the wage advantage was passed on.
Government ministers are likely to use the report to back policies such as Sure Start, intended to provide help in the earliest years of childhood to poor families, and to the expansion of higher education. The Conservatives say that 13 years of Labour government have resulted in less social mobility than before.
OECD chief economist Pier Carlo Padoan said all governments facing ballooning deficits should seek efficiency gains from public spending, particularly in education and health, and avoid "harmful" labour and capital taxes.
He also said that the response to the crisis has left "new challenges in the form of moral hazard and weak competition" in the financial sector.
"Regulators across the OECD need to step up ongoing efforts to strengthen financial market regulation," he said in the 250-page report.
By: Larry Elliot, Economics editor (Guardian)
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