patrick.net

Welcome to the lottery of birth.

Britain is joined by the U.S., France and Italy in having a high correlation between parents' earnings and those of their children, according to a report by Standard Life Investments. The relationship also exists in Scandinavian economies as well as Australia, Germany and Canada, but to a lesser extent.

That's creating challenges for the most-affected countries. Such societies tend to waste or misallocate human capital; workers are often less motivated and as a result, less productive; and the associated higher levels of inequality are found to be detrimental to economic growth, the research shows.

"In practically all countries for which evidence is available, there is a clear link between what your parents earned and your own earnings prospects,'' said Jeremy Lawson, chief economist at Standard Life and a lead author of the report. "Addressing low mobility is challenging. There is no global silver bullet, with each country facing issues in its own unique institutional and policy environment.''

Full Article: https://www.bloomberg.com/news/articles/2017-06-28/yes-your-parents-status-does-influence-your-earning-power

#Economics #Wages #SocialClass #Culture