Understanding Social Mobility – An experimental approach

Funding agency: Austrian National Bank (project number 18633)

Amount: Euro 247'000

Project duration: Oct 2021 - Sep 2024

Project team:
Jean-Robert Tyran
Axel Sonntag

Short description:

Social mobility evokes the meritocratic ("American") dream of earning a better life through hard work, while lack of social mobility means that those at the bottom of the social ladder are doomed to remain there, no matter how hard they try. This project (i) experimentally investigates the relevance of the following structural determinants of social mobility: the degree to which success is driven by luck rather than effort, discrimination, wage compression, and the degree of social stratification. We then (ii) explore how different policy interventions such as income or inheritance taxes affect social mobility under varying structural conditions. We (iii) also investigate peoples' acceptance of alternative policy measures by the means of voting. We develop an economic model with competition for status and accumulation effects which result from status-dependent access to production technologies. This model serves to generate benchmark predictions that we put to a test in the economic laboratory.