UBS Center Newsletter December 2017

9 / 12

9
Publications
Public Paper Series
central in justifying large inequalities in income, as
differences in income are an incentive to expend effort
to get to the top. The numbers show, however, that
this mechanism in Switzerland only works in a lim-
ited manner. Increases or decreases in salary over the
course of a career remain in tight limits, and in real-
ity, low-income earners usually remain low-income
earners, and high-income earners generally remain
high-income earners. The same applies over genera-
tions, where children of high-income earners usually
become high-income earners, and many children of
low-income earners also later become low-income
earners. The authors consider educational mobility –
where Switzerland has low values – to be the main
explanation for the low intergenerational mobility,
which is also internationally very low. For example,
the share of university students whose parents have
low education levels is extremely low with 6%. Since
You can download the Public Papers from our website anytime:
education determines a person’s productivity, it is also
the determining factor for his or her salary level. The
praised dual educational system in Switzerland in its
present form results, in addition to low unemploy-
ment, in low educational mobility.
The new UBS Center Public Paper also emphasizes
that the public debates and political activities on the
theme of inequality address perceived rather than real
problems, and that, from both an economic and an
ethical point of view, it would make more sense to
discuss the improvement of educational mobility
rather than income inequality. Research results show
that, in particular, preschool care and early entry into
school, public schools of high quality, and a stipend
system for students from low-income families can
increase educational mobility – and as a direct conse-
quence of this – also income mobility.
About the authors
Reto Föllmi is Professor of Economics and Director
of the Swiss Institute for International Economics
and Applied Economic Research at the Univer-
sity of St. Gallen.
Contact:
Isabel Martínez is a research associate at the
Swiss Institute for International Economics
and Applied Economic Research at the
University of St. Gallen.
Contact: