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VoxEU Column Europe's nations and regions Poverty and Income Inequality Education

New evidence on social mobility in Germany

According to the OECD, social mobility in Germany is lower than in most other developed economies, reigniting a debate on equality of opportunity and shortcomings of the education system. This column discusses how census data can be used to obtain high quality mobility statistics for Germany. Using the Abitur educational qualification as a measure of opportunity, it suggests that relative mobility has remained constant for recent birth cohorts but points to substantial geographic variation in mobility measures across regions in the country.

According to the latest numbers from the OECD, social mobility in Germany is lower than in most other developed economies (OECD 2018). This finding reinitiated a debate among the German public on equality of opportunity and shortcomings of the education system.

At the same time, the OECD estimates, as other available evidence on social mobility in Germany, are subject to considerable uncertainty. Like many other studies, the OECD measures social mobility by the association of parental and child income, using data from the German Socio-Economic Panel (GSOEP), the main household panel study in Germany.

While the GSOEP contains rich information on the surveyed individuals, and allows linking of children to their parents, its key limitation is its small sample size. Mobility statistics estimated from the GSOEP data are therefore sensitive to small variations in sampling criteria, resulting in a wide range of plausible estimates (Schnitzlein 2016). This sensitivity is reflected by the fact that, using the same data, several studies report substantially higher estimates of income mobility than those reported by the OECD (Hufe et al. 2018).

These issues are exacerbated if one is interested in how social mobility varies across different parts of the population, at the regional level, or over time. As a consequence, the empirical evidence on social mobility in Germany is scarce and substantial knowledge gaps remain.

In recent research, we propose and implement a measurement strategy for social mobility in Germany that allows us to characterise mobility at a higher level of detail than previously possible (Dodin et al. 2021).

While measures of social mobility can take different forms, they all address the question to what extent children of different socioeconomic backgrounds are offered the same economic and social opportunities.

Across disciplines, efforts to understand and describe this association have been made, with different disciplines emphasising different outcomes. While early sociological studies focused on occupational transitions between generations, educational research studied intergenerational correlations in educational attainment. In economics, the most common measures of social mobility rely on realised incomes of children and their parents.

We take an intermediate approach. While we maintain income as a proxy for parental background, we measure the opportunities of children by considering their educational trajectories. This choice is motivated by Germany’s early tracking system of secondary education, which allocates children into different school tracks at the age of ten and where only the successful completion of the highest track results in the award of an Abitur (roughly equivalent to A-levels). Only the Abitur grants direct access to university, opening up the full range of career prospects. Consequently, having obtained an Abitur is associated with a substantial wage premium of more than 40% and predicts a wide range of other desirable non-monetary outcomes. For these reasons, we view the Abitur qualification as a compelling measure of opportunity in the German context and characterise social mobility in terms of the probability of attaining an Abitur for children of different parental backgrounds.

The Abitur is obtained around the age of 18, when most children still cohabit with their parents. Our measurement approach therefore permits the estimation of mobility statistics using census data, where children can be linked to their co-residing parents. Using a sample of 526,000 children, we ask how the probability to obtain an Abitur varies with the parental income rank, that is the parent’s relative position in the national income distribution.

Figure 1 displays this relationship in our data: the conditional probability of obtaining an Abitur is well approximated by a linear function and the slope of the corresponding linear fit is estimated at 0.52. This implies that a child born to parents at the top of the income distribution is about 50 percentage points more likely to graduate with an Abitur than a child born to parents at the bottom of the distribution.

Figure 1 Social mobility at the national level 

 

Note: This figure shows the fraction of children aged 17-21 with an Abitur by percentile rank of their parents in the national income distribution. The reported slope coefficient of 0.0052 (SE 0.004) is estimated by OLS using the underlying micro data.

We refer to this slope parameter as the parental income gradient. This gradient is a measure of relative social mobility, as it captures the gap in the probability of obtaining an Abitur between children from high- and low-income households.

We document several new facts about social mobility in Germany. First, we show that relative mobility, as measured by the parental income gradient, has remained constant for recent birth cohorts. This is displayed in Figure 2, which depicts the gradient for the 1980-1996 birth cohorts.

Figure 2 Parental income gradient by cohort

 

Note: This figure shows for children aged 17-21 the evolution of the parental income gradient by birth cohort.

We consider this noteworthy, as these birth cohorts were affected by the Bildungsexpansion, a large-scale expansion of upper secondary education in Germany that, starting in the early 1970s, increased the Abitur share from around 20% to approximately 50% for the birth cohorts since the mid-1990s. This long-term expansion was a policy response to a public debate on social mobility and the increasing importance of education for economic growth. We document that the Bildungsexpansion took place uniformly across the income distribution, with almost identical increases in the Abitur share in all quintiles of the parental income distribution, as depicted in Figure 3.

Figure 3 Abitur share by cohort quintile

 

Note: This figure shows the share of children born between 1980 and 1996 who obtained an Abitur by birth cohort and quintile of the parental income distribution.

As a consequence, the gap between the top and bottom in the probability of attaining an Abitur – that is, the parental income gradient – remained constant.  These results show that an untargeted expansion of higher education does not by itself ensure higher relative mobility prospects for children from disadvantaged backgrounds.  At the same time, mobility increased in an absolute sense, as at the bottom of the parental income distribution, children born in 1996 were more likely to obtain an Abitur than children born 15 years earlier. 

Second, we present evidence of substantial geographic variation in mobility measures across regions in Germany. The German debate on social mobility often centres around the education system. By constitutional law, the responsibility for the design and implementation of the education system falls under the jurisdiction of the German states and not under the jurisdiction of the federal government. For example, states differ in the duration of primary school after which all children are allocated into the different tracks, the number of tracks and the importance of teacher recommendations for admitted track choices. 

If these factors were the main drivers of mobility differences in Germany, one would expect that mobility measures vary primarily at the state level. However, we find that relative mobility varies substantially even within states, suggesting that state-level education policies are not suited to explain the pronounced differences across regions. Figure 4 presents a heat map of relative mobility at the level of the 258 German local labour markets, which are aggregations of counties based on commuting flows. Blue areas represent areas of high mobility (low gradients), whereas red areas indicate a high gradient. While local labour markets in the East exhibit lower mobility on average, clusters of high and low mobility are spread out across all of Germany and extend across state borders. 

Figure 4 Regional variation in social mobility

 

Note: This figure displays a heat map of the parental income gradient by local labour market. The estimates are based on children aged 17-21.

In some rural local labour markets, the parental income gradient ranges below 0.3, whereas in the least mobile areas the gradient exceeds 0.8. In these regions, a child born at the top of the income distribution has an 80 percentage point higher chance of obtaining an Abitur than a child born at the bottom of the distribution.

These differences persist even between major German cities. For example, the top-bottom gap in the probability of attaining an Abitur is approximately 20 percentage points larger in Bremen than in Hamburg, two cities in north-west Germany approximately 100 kilometres apart.

What explains these regional differences? Does growing up in Bremen cause lower mobility prospects for children born there than for children born in Hamburg? An alternative explanation for mobility differences is systematic sorting of households into certain regions. If, for example, (i) parental education differs across areas because households sort into different local labour markets based on their education status and (ii) parental income and education are correlated, geographic differences in mobility patterns would arise even if mobility was not shaped by local characteristics. However, we find that sorting is unlikely to explain regional mobility differences.

Our findings therefore suggest that in Germany, local characteristics are important for social mobility, consistent with evidence for the US discussed in Chetty et al. (2018a, 2018b). While our data do not allow us to answer conclusively which local characteristics generate the documented regional disparities, we hope that future work will be able to build on our analysis and shed more light on this question.

References

Chetty, R, N Hendren, M R Jones and S R Porter (2018a), “Race and economic opportunity in the United States”, VoxEU.org, 27 June.

Chetty, R, Friedman, J, Hendren, N, Jones, M R, and S R Porter (2018b), “The Opportunity Atlas: Mapping the childhood roots of social mobility”, VoxEU.org, 6 November.

Dodin, M, S Findeisen, L Henkel, D Sachs and P Schüle (2021), “Social Mobility in Germany”, CEPR Working Paper 16355.

Hufe, P, A Peichl and D Weishaar (2018), “Intergenerationelle Einkommensmobilität: Schlusslicht Deutschland?”, ifo Schnelldienst 71(20): 20-28.

OECD (2018), A Broken Social Elevator? How to Promote Social Mobility, OECD Publishing, Paris.

Schnitzlein, D (2016), “A New Look at Intergenerational Mobility in Germany Compared to the US”, Review of Income and Wealth 62(4): 650–667.