The Myth of Danish Mobility

by Gregory Clark, Professor, Department of Economics, University of Southern Denmark

Subheading : In 2020, the international organization The World Economic Forum ranked Denmark as the most socially mobile country in the world. At the top of the list, Denmark was joined by its Nordic neighbors: Norway, Sweden, Finland, and Iceland. Not only are the Nordic countries considered the happiest places in the world, but they are also widely seen as the most equitable. A highly mobile society is characterized by the unpredictability of one’s position in the social hierarchy at birth. The daughter of a street cleaner should have the same chances in life as the daughter of a doctor. When socioeconomic outcomes are predictable from birth—based on factors such as parents’ social status or geography—a society is said to be immobile.

Conventional measurements of social mobility, which are based on comparisons of social status between closely related family members, such as parents and children or siblings, typically show that in the Nordic countries there is little connection between relatives in terms of education, income, or health. In other words: social mobility appears high.

This seemingly strong mobility in Denmark—especially when compared to more market-oriented economies such as the U.S. and the U.K.—has served to justify high tax burdens and substantial public spending on social services.

However, when social mobility is measured based on more distantly related family members, the correlation in socioeconomic outcomes in both Denmark and Sweden turns out to be surprisingly strong. This suggests the existence of an underlying factor that influences socioeconomic status within families—even across in-laws.

Strong connections in educational attainment

Social immobility in Denmark is evident in the surprisingly strong connection in educational levels between more distantly related family members such as cousins, uncles, sisters-in-law, and brothers-in-law. In fact, this connection is almost on par with the correlation in socioeconomic outcomes between siblings.

In a society like Denmark, which is widely considered to be highly mobile, one would not expect family background to have a strong influence on an individual's opportunities and success in life. Yet the reality in Denmark is that elite and underclass families still tend to produce elite and underclass children, grandchildren, and great-grandchildren.

When examining how social status persists across generations, it turns out that social mobility in Denmark is on the same level as in the U.S. and the U.K. Even more striking is the finding that Danish social mobility rates are no higher than those of 19th-century Britain or Sweden. This suggests that the social spending of the Nordic welfare state has not raised social mobility above levels seen before the Industrial Revolution—or those observed today in the United States.

If Denmark—and indeed all Nordic societies—are in fact relatively immobile, why do conventional estimates suggest otherwise? The explanation appears to be that the distinctive social structure of the Nordic countries, where education is free and widely accessible, and where wage differences between high- and low-status occupations are compressed, makes conventional measures of social status (typically years of education or income) poor indicators of actual status.

The low barriers to entering university in Denmark mean that today there are students who complete many years of study without necessarily achieving a corresponding increase in knowledge. Thus, years spent in education have become a relatively weak marker of social status, and a person’s real educational status is more closely determined by their field of specialization or the prestige of the university awarding their degree. In addition, generous public subsidies reduce the cost of delaying entry into the productive workforce.

Income as an indicator of social status

In other societies, such as the U.S., income is a much stronger indicator of social status. For example, an average doctor in the U.S. earns around DKK 2,400,000 a year, compared to DKK 250,000 for a bus driver—ten times as much.

But in the Danish social system, income differences between social classes have been compressed. The average annual salary for a doctor in Copenhagen is about DKK 900,000, compared to DKK 431,000 for a bus driver in the same city—only twice as much. This means that the correlation between parents’ and children’s income in Denmark says far less about their actual social status, unlike in the U.S., where income is a strong reflection of social standing.

The effectiveness of the Danish welfare state

Although Denmark has a comprehensive welfare state with major investments in education and social services, this has not necessarily led to increased social mobility. This may indicate that these resources are not being used effectively, and that too much is being spent in areas that fail to deliver the intended results. Denmark spends a significant portion of its national income on education (10%), and the current reforms aiming to shorten and restructure master’s programs in the humanities and social sciences may be sensible—if the current programs are not helping children from disadvantaged backgrounds gain better life opportunities.