Denmark may not be all that socially mobile

It's commonly thought that Denmark—and Scandinavian countries in general—are especially socially mobile. In these paradises, the theory goes, birth is not destiny. Because of high quality egalitarian education, healthcare, and progressive social attitudes, one's birth has less connection with one's life outcomes than anywhere else, especially the cut-throat conservative USA.

There's something to this view, but a new working paper from famed Nobelist economist, and education expert James Heckman (pdf), throws it into question. Heckman finds that Denmark does indeed have a more mobile society than elsewhere in terms of income, but that this does not mainly come from a generally more fluid and equal society in general.

In fact, the higher measured income mobility is "largely a consequence of redistributional tax, transfer, and wage compression policies". When it comes to educational mobility, the countries are more or less the same. To state that another way: those growing up with less advantage in Denmark don't do better than those in the US because they have high-flying careers and great labour market success, but because Denmark has higher taxes and benefits.

This adds to a large literature finding that there is little we can do to strike at the causes of inequality. Intelligence and the abilities that the labour market rewards come mostly from things we can't do much about. But we certainly can blunt the income effects of unfair endowments of skills through handouts from the state.

And it adds to another body of evidence finding that Scandinavian countries are not as magical—in policy terms—as we think. For example, the descendants of Norwegians, Finns, Danes and Swedes actually do better in the USA (pdf), under their relatively laissez faire hands-off policies, than they do under the relatively interventionist Nordic models. It just looks like Scandinavia is doing better because such a high proportion of its populace are Scandinavian, who tend to have good outcomes whichever system they're under.

There are some things that are just really hard to change!