Only policies that narrow the economic gap can reduce social inequalities

The Social Mobility Commission continues its excellent work. So all are agreed; the chances of success in life should not be dictated by where you are born, or the wealth of your parents. We should all get an ‘equal, start. But for children today, the circumstances of your birth largely determine the rest of your life. Sir Michael Rutter put it simply, if you want to guarantee a good life, choose your parents well.

It is encouraging that politicians of all parties are concerned about social mobility, and they seem to be worried about inequality. So to be clear on definitions, inequality is not about poverty per se, it is about the vast gulf between the richest and the poorest. As countries become more unequal, the social class gradient becomes steeper. Hence the chances of a child born to a low-income family growing up to be a middle-income adult reduce.

The steps between extreme poverty, low income, middle income, wealthy, and extremely rich become too high to climb. Countries that have less inequality tend to have more social mobility because the steps between the social classes are less steep. More importantly, parents are less concerned about maintaining or enhancing the status of their children, because the consequences of going one step up or down are less severe.

The Labour government, the coalition government and the current Conservative government all had plans for improving social mobility. The two key policy areas have been educational attainment and employment. Taking the second first, it is true that your chances of being poor are much greater if you are without any work.

However, the huge increases in employment have also resulted in huge increases in in-work poverty. Employment no longer means an escape from poverty. Either individuals do not work enough hours, wages are too low, and/or the cost of work in terms of transport and childcare are too high.

We now have more children in poverty living in households where at least one adult is working, than living in workless households. Moreover, while employment can reduce poverty, it does not address social mobility. Low-paid work that is subsidised through tax credits rarely provides the career progression needed for social mobility.

Educational attainment, historically, has been a major route to social mobility. But the vast expansion of university places has not resulted in increased social mobility.

Indeed, going to university is saddling young people from poorer backgrounds with huge debts while often not fulfilling the promise of well-paid jobs. Social capital is critically important for entrance to the professions and most career-track jobs. It is a politer sociological term for who you know. As parents, we provide our children with a social milieu which teaches them what is possible.

If, when growing up, most adults a child comes in contact with are well educated and in interesting jobs, they will consider this the norm of what adults do. While it is possible for children and young people to transcend these expectations of childhood, the odds are stacked against those who don't grow up with these subtler advantages. It is no coincidence that particular professions like acting and medicine seem to run in families.

The biggest obstacle to intergenerational mobility is parents themselves. While politicians want to improve the chances of a child from a disadvantaged background achieving success in adulthood, it does mean that a child from a relatively advantaged background will have to slide down. Parents will work hard to ensure it is not their child who is replaced near the top.

Are there policy solutions to this conundrum? Well, surely educational attainment is part of the solution, an essential element but not sufficient on its own. It improves the odds for children from poorer backgrounds, but does not provide a level playing field.

Increasing the minimum wage also has a role to play; reducing poverty at the bottom end of the spectrum will help take some of the pressures off parents. Reducing financial pressures allows more time and emotional energy for talking, reading, going on outings with children. But the most effective policies for reducing inequality are significantly harder: slowing down the growth of incomes at the top end, and increasing tax on capital: inheritance tax in particular.

Those of us lucky enough to have bought houses 20 to 30 years ago do not have an increased asset because we worked hard. We were lucky enough to buy and see our asset grow. Our children did not work to pay the mortgage, but they grow up knowing at some point they will inherit. Finally, we need an economy that demands skilled jobs, and a secondary and further education system that prepares all young people for those jobs. Fragmented policies that do not link up reducing pressures on families, increasing support, improving educational attainment and building a thriving economy are bound to make the sum of the parts less than the whole.

Naomi Eisenstadt is senior research fellow at the University of Oxford