Patrick Allmis (University of Cambridge) will present his paper “Mobile but Miserable,” co-authored with Matt Elliott, Christian Ghiglino, and Alastair Langtry.
Abstract: In high social mobility societies, individuals’ economic outcomes depend heavily on their own ability and less on their parental background. This is overwhelmingly viewed as a good thing. But we present suggestive evidence that the relationship between social mobility and overall well-being follows an ‘inverse-U’ shape. When social mobility is relatively high, more of it does not appear to be good for well-being. In light of this, we present a model to explore how social mobility affects overall welfare when individuals compare themselves to others. We show that the welfare effects of higher social mobility depend critically on the network of social comparisons. Specifically, for higher mobility to improve welfare, we need to first integrate communities so that people’s friendships – not just their economic outcomes – can be influenced more by their ability and less by their parental background. Pursuing policies that increase social mobility while ignoring the network could be worse than doing nothing at all.
Link to the RITM Economics seminar web page