New research on economic mobility has shown that good vocational training will get you far up the career ladder in Switzerland but to rise to the very top – to live the so-called American dream - you’ll probably need an academic degree.This content was published on August 25, 2020 - 14:00
“We find that intergenerational labour income mobility is high – higher than in Sweden. This is rather surprising for a ‘market-oriented’ country,” study co-author Patrick Chuard told swissinfo.ch.
The research, published by economists at the University of St Gallen, used official labour income data from 1982 onwards (backed up by census information and structural survey data) to compare social mobility in 850,000 child-parent relationships.
They then looked at how Switzerland did compared to other countries like the United States, Italy and Sweden. (The study did not take into account migrant children born abroad and this could be the subject of separate research, the university says).
The study found that a child in Switzerland whose father had the highest income rank could expect to earn roughly CHF68,000 a year (almost $75,000) around the age of 30 (2017 figures, adjusted for inflation). But a child whose father had the lowest income rank could also achieve a very respectable annual income of CHF56,000 at the same age. That’s a difference of CHF12,000.
So effectively, in Switzerland, if your father is a big earner, you won’t necessarily earn a whole lot more at age 30 than someone with a low-earning father.
Here, Switzerland did better than Sweden, traditionally considered an egalitarian society, and far outstripped the United States, where children were found to be more likely to follow in Dad’s footsteps income-wise.
But despite decent income mobility in Switzerland, researchers found that educational mobility – the relationship between a child’s education and the father’s income – is quite low. Whether you go to university depends highly on your parents’ income, a long-known trend seen in other studies.
“This is a bit puzzling because you would expect that a country with high income mobility also has high educational mobility,” said Chuard. “However, when we also consider non-university tertiary education, Switzerland does much better in educational mobility.”
Apprenticeships are by far the most popular form of upper secondary education in Switzerland, with more than two-thirds of school leavers opting for vocational training after compulsory school.
The study estimates that around 40% of those who did apprenticeships go onto non-university tertiary education afterwards, such as degrees from universities of applied sciences, and other higher vocational degrees.
And those degrees are likely to generate a higher wage.
“It’s very likely that the high intergenerational income mobility in Switzerland is driven by its strong vocational education system,” said Chuard. “This makes sense intuitively: If your parents aren’t rich you can do a vocational diploma at 16 which is much cheaper for your parents and you even earn a small amount.”
After vocational education, these students can go to a more practical university of applied sciences part time and still earn something – without financial support from their parents. At the end, an applied sciences degree is “almost as valuable” as a university degree, Chuard explained.
Einstein and the American dream
Vocational training could be therefore an “effective equaliser,” the study argues, at least for climbing part of the way up the social mobility ladder.
However, the research shows that to really make it from the bottom to the top income quintile, a university degree is still important.
And because getting an academic education largely depends on the father’s income, Switzerland might miss some potential “Einsteins” (those with high academic potential) due to this, the authors argue. (Interestingly, Albert Einstein studied at a Swiss baccalaureate school as well as the Swiss Federal Institute of Technology ETH Zurich).
So how does Switzerland compare with the US, the land of the American dream where the idea of upward mobility is especially prized?
In terms of traditional educational mobility, Switzerland is on par with the US.
“Family income is as highly correlated with going to university as it is in the US,” said Chuard. “This is a bit surprising because university education is much cheaper in Switzerland.”
But overall it is easier to live the American dream in Switzerland (with 12.9% of children moving from the bottom quintile to the top quintile) than in the US (7.5%), the study concluded.
Sweden is still the place to beat in this survey. Overall, children there are the most likely to rise up the social ladder with 15.7% from the bottom of the economic pile making it to the top.