Just a small improvement to social mobility in the UK – bringing it up to the western Europe average – could lead to an annual increase in GDP of £590 per person, according to new research by economic consultancy Oxera for the Sutton Trust. This improvement to social mobility could boost GDP by 2.1 per cent in the long term, equivalent to around £39 billion in total.

The Oxera report – which will be presented at the Trust’s 20th anniversary summit opened by Education Secretary Justine Greening today – comes as new Ipsos Mori polling finds growing public pessimism about the chances of today’s young people getting further than their parents. The research is published with a new report from the Boston Consulting Group (BCG) that examines the state of social mobility in the UK and likely challenges for the future.

Social mobility and economic success

The Oxera report examines historical changes in social mobility in the UK and analyses the link between social mobility and economic performance. It finds that even if levels of social mobility were brought up to the level of the next best performing country in Europe – the Netherlands – the UK could expect GDP to increase by around £370 per person, or £24 billion in total.

According to the analysis, the major factor driving the relationship between improving social mobility and economic performance is better matching between people and their jobs. Better social mobility means that the talents of all young people are recognised and nurtured and that some barriers to jobs – biases in recruitment processes or inequality of educational opportunity – are reduced, according to the report.

“In a more socially mobile society, it is more likely that a job will be filled by someone with the highest level of potential to perform well in that job, rather than someone who may be less well suited but, for example, better connected.”

Evidence from a number of European countries summarised in today’s report confirms that those countries with higher levels of social mobility have people better matched to job opportunities and a more productive workforce.

“Britain has very low social mobility compared to other countries. Our research shows that if social mobility were brought up to the western European average, GDP would increase by 2.1 per cent, equivalent to a monetary value of £39 billion. There is also a low and declining percent of the public (from 43 per cent in 2003 to 29 per cent in 2017) who believe today’s youth will have a better quality of life than their parents,” Sir Peter Lampl, chairman of the Sutton Trust and of the Education Endowment Foundation, said.

“At the Sutton Trust we have been working to improve social mobility for the last 20 years. Although progress has been made, much more needs to be done. The Government should make improving social mobility a top priority. Alongside other initiatives there needs to be a concerted effort to improve early years provision, provide fairer access to schools and universities and address the numerous social barriers which exist.”

Public perception: surprisingly negative

Also published ahead of today’s summit is specially commissioned Ipsos-MORI polling that gauges public perceptions of social mobility and how best to improve it. The Trust has commissioned similar polling in previous years, which allows us to examine how attitudes have changed over time.

Highlighting a growing pessimism with respect to social mobility, just two-fifths of the 2,001 adults surveyed in 2017 agreed that people in the UK have equal opportunities to get on, a big drop on the 53 per cent of the public who agreed with those sentiments close to a decade ago in 2008. More people now disagree than agree.

Despite talk of pessimism among young people in the UK, it was the youngest age groups that were more likely to feel they had better prospects. In fact, 40 per cent of school-age young people from 11 to 16, asked separately as part of Ipsos MORI’s Young People Omnibus, felt they had better prospects than their parents. In the adult survey, 16 to 24 year olds were more likely to say that today’s youth would have a better life than their parents, in comparison to 25 to 34 year olds and 35 to 44 year olds.

There is also a low and declining percent of the public (from 43 per cent in 2003 to 29 per cent in 2017) who believe today’s youth will have a better quality of life than their parents, although it is important to bear in mind differences in sample sizes and survey methods between each of these three surveys.

The respondents were also asked which measures would most likely improve social mobility and help disadvantaged young people get on in life. Almost half  chose ‘high quality teaching in comprehensive schools’ ahead of two social mobility policies adopted by the main parties in the recent election: ‘lower university tuition fees’ and more grammar schools.

Social mobility as a solution to UK’s productivity puzzle

“Social mobility is a good thing in itself – separating an individual’s opportunities from their parental background is a key pillar of social justice. But our analysis demonstrates that it does far more than this. Increasing social mobility can help solve the productivity puzzle, increasing wealth for everyone,” Helen Jenkins, managing partner at Oxera, said.

“Identifying and attracting young people with the highest potential is critical to all service-led businesses, in particular Oxera – in that sense our findings do not surprise me; social mobility is good for businesses like ours, as well as good for society.”

The BCG report focuses on how changes in the labour market could impact on social mobility. It identifies key challenges and opportunities, particularly those associated with automation. According to the research, job losses through automation will have an adverse effect on routine occupations, with most of those hit from low and middle socioeconomic backgrounds. At the same time, the increasing need to re-skill to keep up with the pace of technological change could create new social mobility barriers.

According to Ian Walsh, senior partner and managing director at the Boston Consulting Group, the future of work and in particular automation is likely to bring further challenges for social mobility in the UK. “There will be significant structural change with the destruction of jobs and the creation of new jobs. Continuing to invest in early intervention as well as an emphasis on STEM subjects and apprenticeships, can help fill widening skills gaps and train young people for the new demands of the labour market.”