Social mobility in Catalonia

Much of the discussion about the social situation in Spain ends up being about inequality. In terms of income, inequality in Spain is higher than the EU average, although it has been declining since the beginning of the recovery. The Gini coefficient of income, a common measure of inequality, which ranges from complete equality (0) to maximum inequality (100), rose with the onset of the financial crisis from 32.4 in 2008 to reach 34.7 in 2014. With the economic recovery and the reduction in unemployment, the main factor explaining income inequality in Spain, it reached 33 in 2019. Since then, it has declined further, reaching 31.2 in 2024. This same improvement is also seen in other indicators of income inequality. As I have mentioned in other columns on other dimensions, such as wealth inequality, Spain's position is better than that of many other countries due to the effect of its high proportion of homeowners.

However, analyzing income inequality alone is insufficient. An even more important aspect is social mobility, and in particular, intergenerational mobility, or the ability of future generations to rise in socioeconomic status compared to past generations. This analysis is less common because the availability of statistics and indicators on this aspect is very limited. However, a few years ago, Raj Chetty and his colleagues obtained authorization to work with data from the United States Internal Revenue Service and were able to construct aggregate and geographic indicators of intergenerational mobility. The idea was to analyze how the position of parents in income distribution influenced the income distribution position of their working-age children. This made it possible to analyze an important dimension of equality of opportunity: whether children from families at the lowest income levels were able to rise in the income distribution compared to their parents. The results of this analysis showed the extent to which the United States, traditionally the “land of opportunity,” had become “the land of social stagnation.”

Following this work, the same type of analysis has been conducted in other countries using the same methodology and tax data. Last week, the Opportunities Laboratory presented the second version of the Atlas of Opportunities for Spain. The study analyzes millions of parents and children born between 1980 and 1990 and examines their income over the past 25 years. The first result is the same as that found in all countries: children from lower-income families earn less than children from higher-income families. This gap is small for young people in their mid-twenties, but it clearly widens as their age increases. However, the average income of young people who grew up in a family in the lowest 1% of households reached the 39th percentile, which means they have risen significantly in the income distribution relative to their parents' position. Meanwhile, the 12% of children from families in the richest 1% remain in the richest 1%.

Rise to the lowest rank The average income of young people who grew up in the lowest 1% of households reached the 39th percentile, a big step up from their parents' position.

For an international comparison, we can analyze the probability that a child born into a household in the poorest 20% of households will rise to the richest 20%. In Spain, this proportion is 10.4%, slightly better than the average. Much better than Brazil (2.5%), the United States (7.5%), or the United Kingdom (9%). This is similar to France, Italy, Ecuador, and Canada, and slightly worse than Germany and Sweden (11%) or Denmark, Switzerland, and Australia (12%). It is interesting to note that in the first version of the Atlas of Opportunities, Spain achieved a percentage of 12%, on par with the best.

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However, what surprised me most is the geographic distribution of intergenerational social mobility. The social elevator works differently in each city, and even in each neighborhood. The postal code-level graph accompanying the project website shows that the greatest social mobility occurs in Catalonia, with a very high level in Lleida. Madrid and the provinces of Soria and Segovia follow at some distance. The lowest social mobility is concentrated in the south: Andalusia and Extremadura. In fact, the top 18 cities with more than 100,000 inhabitants with the highest level of social mobility are located in Catalonia and the Community of Madrid. The top three cities with the highest intergenerational mobility are Hospitalet de Llobregat, Lleida, and Barcelona. In all three cities, the average income of children from families in the poorest 25% exceeds the 51st percentile, a very significant increase. It is interesting to note that this effect is very different from what happens in the United States, where large cities have very limited levels of intergenerational mobility.

What's more, while intergenerational mobility worsened somewhat across Spain between the 1980s and 1990s (particularly in the Community of Madrid), Catalan cities such as Terrassa, Hospitalet, and Barcelona itself have maintained a very high level of upward social mobility.

Social elevator The greatest social mobility occurs in Catalonia, with a very high level in Lleida, according to the Atlas of Opportunities

It's true that these indicators aren't perfect. Using administrative data from the Tax Agency is positive because it avoids having to rely on the income self-reported by respondents in surveys. However, not all citizens file tax returns, and therefore, some low-income families are not represented. Furthermore, assets, and particularly home ownership, are not taken into account. But these indicators are undoubtedly tremendously interesting when analyzing intergenerational mobility and better than the few available alternatives. In short: Catalan cities are at the forefront of intergenerational mobility in Spain, especially in the most recent cohort, and on par with the Nordic countries. I'll end with a classic: "Here's to you, we're not that bad!"