Nations can learn from Nordic and other European countries when it comes to helping people scale up the economic ladder, and countries like China and the United States could reap billions by boosting social mobility, a report said Monday.
The World Economic Forum released its first “Global Social Mobility Index,” which analysed 82 countries and suggests that governments should ensure a level playing field not just because it is the right thing to do, but it can benefit their economies.
The release comes a day before the forum opens its latest annual gathering in Davos, Switzerland, where concerns about growing inequality are high in the minds of organizers.
“Inequality has become entrenched and is likely to worsen amidst an era of technological change and efforts towards a green transition,” the forum said.
The index ranked Denmark, Norway, Finland. Sweden and Iceland as its top five countries, registering over 80 points on a 100-point scale, while the United States came in at 27th, Russia was 39th, and China took 45th.
“If economies were able to improve their social mobility score by 10 points, (gross domestic product) would increase by 4.4 percent by 2030 on top of the societal benefits such investments would bring,” the forum said in a statement.
The authors estimated China had the “most to gain” and its economy could grow by more than $100 billion annually over the decade, followed by the US at $87 billion.
Saadia Zahidi, a forum managing director for the new economy and society, said the report found that governments for now could make the greatest improvement in boosting social mobility by supporting wages, quality of work and “life-long learning systems." “These are not things that are going to create a drag on growth," Zahidi said. "These are actually things that are going to facilitate better growth. So that's one aspect. The second aspect is that the gains can actually be quite big.”Zahidi said she considered the index as warning sign or even a solution "to the trend towards entrenched inequality.”