How can poor people be reached

Social leaders: can the poor get rich and the rich get poor?

How high is the probability that a child from a poor family in Austria will become rich until adulthood? Would you dare to give an estimate? And how is it the other way around? What are the chances that a child from a rich family will face poverty later?

One might first ask why subjective opinions on the permeability of an economic system should be relevant in a scientific blog. It turns out, however, that there are good reasons to deal with perceptions - and in this particular case with the perceptions of Austrians - regarding the way our society works.

Basically, people make their decisions based less on the objective external circumstances of their environment, but rather on how they perceive them. Since individual perception and reality often systematically differ, especially with regard to economic policy issues, economics has also begun to deal more intensively with these perceptions.

Concepts of social mobility

It turns out that some theories about human behavior suddenly have a much higher explanatory power if one includes subjective impressions instead of objective factors. For example, subjective perceptions can help us to better understand voting decisions or economic policy preferences. Or would you advocate a strong welfare state if you are convinced that nobody in Austria depends on it? And that the perceptions of social mobility in particular are closely interwoven with the personal ideal of the welfare state and tax system has been the focus of at least since the innovative study "Intergenerational Mobility and Preferences for Redistribution" by Harvard economists Alberto Alesina, Stefanie Stantcheva and Edoardo Teso Science moved.

So far, however, this research field in Austria has largely not been illuminated. New survey results help us to shed some light on this for the first time. As part of an international research project, 1,161 Austrians were asked to give their assessments: How many out of 100 children from the poorest 20 percent of Austrian households will later remain below the poorest 20 percent? And how many of them end up in the top 20 percent of the income distribution as adults? The perception of downward mobility was also surveyed: How many out of 100 children from the richest households remain rich as adults and how many later end up among the poorest in society?

As shown in the graph below, Austrians believe on average that out of 100 poor children, just under 37 will remain poor as adults, while around ten children will make it into the group of the richest people. Incidentally, not two, but five income groups were asked in the survey. For the sake of simplicity, however, only the poorest and richest groups are shown, so the numbers do not add up to 100.

It is different with the rich

With regard to the future prospects of children from the richest families, the picture is reversed. On average, it is assumed that out of 100 children from rich parents around 53 children will also be among the richest households as adults, while only eight out of 100 children with rich parents will find themselves in the group of the poorest people as adults.

In the perception of Austrians, it still makes a big difference today whether a child is born into a poor or a rich family. Another consistently interesting observation is that the persistence of poverty (the likelihood of later remaining poor as a poor child) is far lower than the persistence of wealth (the likelihood of later remaining rich as a child of a rich family).

Perception and reality

In an international comparison, Austria is relatively inconspicuous. The ideas of social mobility are similar to those of the population in France, Great Britain and Sweden. Compared to actual, objective data on social mobility, European countries tend to be more pessimistic than reality. Conversely, Americans are more likely to perceive more social mobility than actually corresponds to the observed facts. In Austria, work is currently underway to create a data set on actual social mobility as well. Unfortunately, such a direct comparison between perception and reality is not yet possible.

With regard to actual figures on social permeability in Austria, there are, among other things, some studies on the education system, whereby permeability here refers to the extent to which the education of parents determines that of children. Comparisons between the formal educational level of the parents and the educational qualifications of their children are used, for example, to determine the probability that a child will attend university even though the parents left the educational system after compulsory schooling. It should no longer be a secret here that persistence in Austria's education system occupies one of the top positions within the OECD.

Difference parties

If we come back to the perception of social mobility, we see striking differences in perception between different subgroups of society. Impressively (and as expected) great, for example, are the differences between voters from different parties. The voters of the SPÖ, List Pilz and the Greens have very pessimistic ideas about how social mobility is structured in Austria. They perceive a high persistence of poverty and wealth. The opposite is true for declared non-voters and voters of the ÖVP and the FPÖ: These groups have a relatively optimistic idea of ​​social mobility and perceive much higher opportunities for advancement and relegation on the social ladder in Austria.

Difference in level of education

If one looks at different formal educational groups, a similarly heterogeneous picture emerges. In short, as the level of education rises, we see a decrease in optimism about social mobility. People who state a university degree perceive a relatively low level of social permeability. If, on the other hand, you ask around in population groups with a maximum of compulsory schooling, the perceived social mobility increases sharply in comparison. In between there are apprenticeship degrees, BMS, AHS and BMHS.

Poor stays poor, rich stays rich?

As much as the views of the various groups differ on the exact extent of social mobility, there is still a remarkable agreement among Austrians on some points. Across the population, people state that in their perception it makes a big difference for the future path of life whether one is born into a poor or a rich family. Accordingly, children from poor families are more likely to stay poor later, while children from rich families are more likely to stay rich. Few children from poor households make the leap to the top later, while fewer children from rich households tend to have to make the way to lower income groups. (Gregor Zens, Philipp Why, July 9, 2019)

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