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Does Economic Inequality Account for Cross-Country Discrepancies in Relative Social Mobility: An Empirical Investigation

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  • John Weirstrass Muteba Mwamba

    (School of Economics, APK Campus, University of Johannesburg, Johannesburg 2006, South Africa
    Department of Educational Studies, Faculty of Education, St. Catharines Campus, Brock University, St. Catharines, ON L2S 3A1, Canada)

  • Paul Mumba Shiwamya

    (Faculte’ des Sciences de Gestion, Université Nouveaux Horizons, 2465, Route Kasapa Quartier Gambela, Lubumbashi 2465, Democratic Republic of the Congo)

  • Benjamin Mudiangombe Mudiangombe

    (School of Economics, APK Campus, University of Johannesburg, Johannesburg 2006, South Africa)

Abstract

This paper makes use of the Markov Switching model and the K-Means Cluster analysis to estimate the transition probabilities of social mobility and to analyze the impact of social inequalities on intergenerational social mobility. The dataset is a sample of 44 countries and comprises the 2018 social mobility indices, and the 2018 or latest income inequality measures. The data are collected from the OECD Income and Wealth Distribution Databases, and from the world economic forum. It was found that the likelihood of moving upward or downward the social ladder is minimal in both developed and emerging countries. In addition, the paper found that the hypothesis according to which high-income countries have a higher relative social mobility is not necessarily true. The United States, a high-income country, was found to have a lower social mobility, similar to that of Turkey and South Africa. Furthermore, it was found that when poverty decreases, intergenerational social mobility increases in both lower and higher mobility countries. Policies that promote equality of opportunities at all stages of life are therefore recommended to improve intergenerational social mobility.

Suggested Citation

  • John Weirstrass Muteba Mwamba & Paul Mumba Shiwamya & Benjamin Mudiangombe Mudiangombe, 2022. "Does Economic Inequality Account for Cross-Country Discrepancies in Relative Social Mobility: An Empirical Investigation," Economies, MDPI, vol. 10(11), pages 1-9, November.
    • Handle: RePEc:gam:jecomi:v:10:y:2022:i:11:p:279-:d:966613
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    References listed on IDEAS

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    1. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    2. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    3. Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-384, March.
    4. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2010. "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 91-128.
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