The Social Mobility Commission have released their latest research. Drawing on their previous work this report explores the degree to which the place you grow up has a lasting impact on your earnings in adulthood.
This is at the heart of social mobility: does growing up in one town rather than another change your life chances? How unequal are outcomes between places across the country? And why do these differences exist?
This report tracks the journey of state-educated sons in England (it was impossible to do this with daughters with the data available) who were born in 1986 to 1988. The report follows these sons through their school journey and their transition into work and earnings from 2014 – 2016. It explores how the earnings of sons from disadvantaged backgrounds vary across local authorities in England, and the role of education and the labour market in explaining these differences.
The Findings:
Where education and other factors can improve the life chances; those from a deprived background but living in an area of high social mobility have better chances of improving their situation (through education primarily) the situation is not the same for all. The report draws out concerns for disadvantaged young people in low social mobility areas never being able to improve their social mobility.
- Where you grow up matters – social mobility in England is a postcode lottery, with large differences across areas in both the adult pay of disadvantaged sons and the size of the pay gap for sons from deprived families, relative to those from affluent families.
- In areas with the highest social mobility, disadvantaged individuals aged around 28 earn more than twice as much as their counterparts in the lowest-mobility areas (over £20,000 compared with under £10,000).
- In areas with low social mobility, pay gaps between deprived and affluent sons are 2.5 times bigger than in areas of high social mobility.
- In areas of high social mobility, educational achievement accounts for almost all the earnings difference between individuals from deprived and affluent families.
- In areas of low social mobility, it is far harder for someone from a deprived background to escape deprivation. Up to 33% of the pay gap is driven by non-educational factors.
- Fifty English local authorities (one in six of those analysed) have both low adult pay for disadvantaged sons and large pay gaps between those from deprived and affluent families.
- Localities with low life chances include Bolton, Bradford, Chiltern, Hyndburn and Thanet. They typically have fewer professional and managerial occupations, fewer ‘Outstanding’ schools, more areas of deprivation and moderate population density.
- To equalise opportunities across the country, government must consider what support can be targeted on these local authorities to improve overall social mobility outcomes.
Where you grow up matters
Where you grow up matters:- Depending on where they grew up, sons from disadvantaged families can earn on average up to twice as much as similar sons who grew up elsewhere in the country. The difference in adult earnings between sons from the richest and poorest families who grew up in the least mobile areas is up to two and a half times as large as the difference in earnings between sons who grew up in the most mobile areas.
Education drives opportunity but education alone is not enough for those in the areas with the lowest social mobility. Whilst in areas of high social mobility 80% of the attainment gap can be explained by education, in the least mobile areas relative educational performance explains only two-thirds of the adult pay gap. This suggests that reducing educational gaps would reduce pay gaps, but would not reduce differences in mobility across local authorities. To ‘level up’ between areas, we need to look beyond education.
This report shows that areas with the most unequal opportunities are more deprived and have fewer professional and managerial jobs. Previous research has shown that the most deprived are hardest hit in bad labour markets – possibly because more affluent sons are better placed to cope by moving away or taking advantage of their family’s financial, social or cultural capital to access the limited opportunities available.
Policy challenges
To equalise opportunities for those from the most and least deprived backgrounds, reducing education inequalities continues to be crucial. But in order to ‘level up’ between the places which have the widest income disparities for advantaged and disadvantaged young people, it is labour market interventions that will make the difference.
- In the areas of greatest inequality, educational investment alone is not enough to remove differences in life outcomes between areas.
- Areas with lower pay for disadvantaged sons and less equal opportunities are very deprived, with fewer education and labour market opportunities.
- This work has set the ball rolling by identifying a group of smaller cities and towns that offer very little opportunity. Further investigations are needed to fully understand the barriers to opportunities, particularly in the labour market, in these places.
Policy suggestions
- Government should use this new evidence to inform policy about the scale and size of its place-based interventions and investment. Evidence from this research pinpoints localities where inclusion in expanded programmes might make the most difference. In the areas of greatest inequality, educational investment alone is not enough to remove differences in life outcomes between areas.
- In the localities with the most unequal outcomes, we need to do more to understand why the labour market is not serving disadvantaged young people. This should include both drawing on local authority leaders’ knowledge and data, and research by central government and independent organisations to trial ‘what works’ labour market interventions.
- Evidence is a critical element to inform good decision-making. Government should continue improving the quality of data collection and linkages necessary to analyse social mobility well. We should aspire to be global leaders emulating the best of what the Scandinavian model has to offer.
Our view
We can not ignore the growing evidence of unfairness endemic in our society. Young people from disadvantaged backgrounds will find themselves fairing worse whether they are from an area of high or low social mobility. We have to do more to rectify this for all young people but most urgently we must ensure that those young people from disadvantaged backgrounds in areas of low social mobility have the right, quality opportunities available for them.
We have to recognise that, whilst a welcome initiative in the plan for jobs Kickstart is only part of the solution, we must ensure that more quality opportunities are available to young people and quickly. We are supporting more placed based work, undertaking two large scale projects in the West Midlands and Greater Manchester creating digital hubs that support young people where they are with local offers and advice suited the individual needs of the area.
It can not remain that the futures of young people are simply decided by their postcode and luck.
