The OECD has been at the forefront of documenting the rise of inequality for several decades. The data paint a stark picture: the average disposable income of the richest 10% of the population is now around nine and a half times that of the poorest 10% across the OECD, up from seven times 25 years ago. Wealth inequality is even more pronounced, with the top 10% holding half of total wealth, while the bottom 40% holds only 3%. The financial crisis reinforced these trends, but inequalities still increased and the benefits of growth still mainly benefited the top of the income distribution in OECD countries even during the highest periods of global economic expansion before 2008. In many emerging and developing countries, inequalities remain large despite significant poverty reduction.

This introductory chapter gives an overview of the entire report drawing on the analyses carried out in the five subsequent chapters. It documents that a growing share of people is concerned about falling prospects of social mobility in their society. The report provides an in-depth review of social mobility between generations along the key dimensions of income, occupation, education and health. It also looks at patterns, driving forces and trends in income mobility over the life course. The report identifies low levels of mobility for those at the bottom as well as for those at the top of the distribution – “sticky floors” and “sticky ceilings”. It discusses the implications of low social mobility and how policies can promote equal opportunities for all and secure sustainable income trajectories for individuals and households.

This chapter considers social mobility from an intra-generational perspective and analyses income mobility over the life course. The chapter explores to which extent levels of income inequality change when taking income mobility into account – so called “permanent inequality”. It identifies the extent of income persistence at both ends of the income distribution in OECD countries and selected major emerging economies – “sticky floors” and “sticky ceilings”. The chapter provides evidence on trends in income mobility between the late 1990s and the early 2010s. It also analyses the structure of income changes and the role of unpredictable “income shocks” for explaining those changes, in particular at the bottom of the income distribution.

This chapter investigates the key drivers of household income mobility from an individual perspective. It considers the impact of so-called “trigger events” – such as changes in labour market status, divorce or childbirth – on income mobility. The chapter shows that changes in labour market status are the main determinant of individual income trajectories, but that, in a number of countries, family-related changes can also play a very important role. In particular, women are more severely affected than men by income losses after a divorce. Net social transfers are a crucial factor to prevent downward mobility, while upward mobility results primarily from labour market dynamics.

This chapter looks at intergenerational mobility in occupational status and earnings. It first investigates the extent to which occupational status is correlated across generations and provides evidence on its evolution over time. It then presents estimates of earnings mobility between fathers and sons for a broad range of OECD countries and emerging economies, as well as some results on the intergenerational mobility of daughters. The chapter decomposes earnings persistence into an educational and an occupational component. It also looks beyond individual earnings by exploring intergenerational social mobility in terms of household income. Finally, it discusses the transmission of earnings and wealth at different points of the distribution.

This chapter studies intergenerational mobility in health and educational outcomes. In the first part, the chapter looks at how parents’ socio-economic characteristics influence the health status of their offspring and analyses intergenerational persistence in self-assessed health and health behaviour. It compares the parents’ health status with other determinants of children’s health. In the second part, the chapter considers intergenerational educational mobility. It analyses upward and downward mobility in educational attainment for children compared to their parents, and looks at movements across educational groups depending on parental education. Finally, it assesses the respective roles of parental background, individual attitudes and various school and school policy effects for educational outcomes.

The chapter builds on the insights gained in the previous chapters to make policy recommendations on how to improve social mobility across and within generations. It relies on the two premises that societies should grant equal opportunities to all of their citizens and that they should attempt to protect individuals’ and households’ income trajectories against adverse personal and labour market shocks. The chapter identifies five broad policy areas on which countries should focus to improve citizen’s mobility prospects: health and family policies, education, labour market policies, tax-and-transfer policies and local and urban policies. For each of these areas, it presents a selection of best-practice programmes and policy initiatives that were recently implemented in OECD countries and emerging economies and that are suited to improve mobility outcomes.