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% in the long term, equivalent to around £39 billion in total.

Oxera research: 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. Oxera says: “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.”

“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.

Sir Peter Lampl, Chairman of the Sutton Trust and of the Education Endowment Foundation, said today:

“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%, equivalent to a monetary value of £39 billion. There is also a low and declining percentage of the public (from 43% in 2003 to 29% in 2017) who believe today’s youth will have a better quality of life than their parents.

“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.”

Helen Jenkins, Managing Partner at Oxera, said:

“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.

“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.”

BCG research:

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 reskill to keep up with the pace of technological change could create new social mobility barriers.

Commenting on this research, Ian Walsh, Senior Partner and Managing Director at the Boston Consulting Group, said:

“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.

“BCG has a long-standing proud relationship with The Sutton Trust. We were delighted to work with them on this important report on the status of social mobility in the UK.”

The Sutton Trust is a foundation set up in 1997, dedicated to improving social mobility through education. It has published over 200 research studies and funded and evaluated programmes that have helped hundreds of thousands of young people of all ages, from early years through to access to the professions