For poor children in USA and UK, a good education is not a sure pathway out of poverty

Photo: capa photos. Creative Commons.

A new study shows that education is far less important for climbing out of poverty in the USA and Britain than in Sweden. This is bad news for policy makers in the USA and Great Britain who hope education can reduce inequalities.

Past research has shown that parents’ income and sons’ earnings are correlated, though more strongly in some countries than others. Previous studies have shown that the correlation is strongest in the USA and weakest in Scandinavian countries. Using more sophisticated measurement techniques, the new study found the same correlation. In the USA, 60% of the income gap among parents persists among their 40-year-old sons. The UK is not far off, at 55%. In Sweden, the figure is 33%.

Put another way, in the US and the UK, if a rich child and a poor child have the same education, achieve the same results in school and have similar cognitive abilities, the rich child is still likely to earn more as an adult.

Two possible pathways for the persistence of the inequality have been proposed. In the “achievement” or “meritocratic” pathway, higher parental income leads to a better education for children, and a better education leads to higher earning. In the “ascriptive” pathway, the process is more direct – children from richer families have more connections and more wealth and get into better jobs irrespective of educational achievement and cognitive ability.

The researchers, led by Professor Paul Gregg at Bath University in the UK, discuss a number of possible explanations for the differences they found.

Perhaps there is a tendency for sons to enter into the same occupations as their fathers. But this happens just as often in the USA as in Sweden and is therefore unlikely to explain the difference between the two countries.

It could be that in Sweden the public sector of the economy is larger, and meritocracy is a larger factor in awarding jobs in the public sector than in the private sector.

In the USA, residential and educational segregation is high, and rich and poor children tend to go to different schools. It could be that children who get a good education and achieving well in schools in poor areas still lack the social contacts needed to translate educational achievement into higher earning.

Another explanation of the difference between the USA and Sweden is that absolute living standards are higher among the poor in Sweden than in the USA, and the Swedish welfare state takes better care of them. In Sweden, then, there are more opportunities for poorer children to attain an income on a par with wealthier peers with the same level of educational achievement.

Gregg P, Jonsson JO, Macmillan L & Mood C (2017), The role of education for intergenerational income mobility: A comparison of the United States, Great Britain, and Sweden, Social Forces 1.31