Social mobility rose in 2000s compared to 1990s

Earnings mobility increased in the 2000s compared to the 1990s, contrary to perceptions, according to new research published today by the independent think tank the Resolution Foundation.

The research focuses on the earnings of people in their 30s and early 40s. While the chances of making a significant move up or down the earnings ladder remained low, they were 22% more likely to see a large jump in their earnings in the 2000s compared to the 1990s. This was particularly the case for the lowest and middle earners, and for men rather than women.

Other key findings include:

•  In the 1990s, less than 3 percent of people who started the decade in the bottom 20% of earnings made it to the top 20% by the end of the decade. Although this doubled in the 2000s to close to 6%, it remained very low.
•  In the 1990s, 56% of those in the top 20% of earnings stayed there for the entire decade; by the 2000s this was still true for 53% of top earners.
•  44% of people remained in the same income bracket over the 1990s, compared to 40% in the 2000s.

The report suggests that the improvements in earnings mobility could be related to a modest fall in inequality in the bottom half of the earnings distribution.

Gavin Kelly, Chief Executive of the Resolution Foundation said: ‘These findings show that while the chances of making a significant move up or down the earnings ladder remained low, social mobility actually rose in the 2000s compared to the 1990s. Whilst this improvement is encouraging it is still a major cause for concern that so many low earners appear to be stuck at their current earning position and struggle to get on’.

Notes to editors

Data is from the 1991 and 2000 surveys of the National Child Development Study and the 2000 and 2008 surveys of the British Cohort Study

The new research looks at two groups of workers born in 1958 and in 1970. It examines their earnings mobility between their 30s and early 40s –at their ‘peak earnings’ potential – during the 1990s and the 2000s.

This work is consistent with other Resolution Foundation analysis that has shown median wages for the workforce as a whole stagnated between 2003 and 2008 and are projected to remain stagnant to 2015.

Lee Savage, research and policy analyst at the Resolution Foundation is the author of the report.