Perceptions of Economic Mobility and Support for Education Reforms

Investment Rating - The report does not explicitly provide an investment rating for the industry under review. Core Insights - The analysis indicates that individuals who expect upward economic mobility are more likely to support tax-financed education reforms, a relationship that is consistent across various economic conditions and persists over time [8][62][63]. - The findings suggest that beliefs about the fairness of economic opportunities and individuals' willingness to take risks partially mediate the relationship between mobility expectations and support for education reforms [9][62]. Summary by Sections Introduction - Structural reforms can enhance incomes but may disproportionately affect certain population groups, leading to increased inequality and resistance to change [5]. - Understanding factors that shape support for structural reforms is crucial for middle-income countries facing economic growth challenges [5]. Literature Review - Economic theory posits that self-interest influences policy preferences, with individuals' experiences of economic shocks affecting their support for safety nets [11]. - Previous studies have shown that expectations of socioeconomic mobility can influence preferences for redistribution and support for reforms [13][14]. Theoretical Framework and Empirical Strategy - The study hypothesizes that support for education reforms financed by higher taxes is contingent on individual expectations of future mobility [21]. - The empirical model incorporates various individual characteristics, including education level, income, and risk aversion, to assess their impact on support for education reforms [22][23]. Data - The analysis utilizes data from the Life in Transition Survey (LiTS) conducted in 2010, 2016, and 2023, covering 39 countries in Europe, Central Asia, and the Middle East and North Africa [27][28]. - Support for tax-financed education investments is measured through respondents' willingness to pay more taxes for education [29]. Main Results - Positive expectations of future mobility correlate with increased willingness to support education reforms, with a one-step increase on the income ladder linked to a 1.4 percentage point rise in support [37]. - Individuals who perceive success as meritocratic are more likely to support education reforms, while risk aversion negatively impacts support [41][42]. Changes in Support Over Time - The relationship between expectations of mobility and support for education reforms has remained stable across the 2010, 2016, and 2023 survey rounds, with stronger associations during periods of economic stability [57][59]. Conclusions - The report emphasizes the importance of managing expectations of socioeconomic mobility to garner support for structural reforms in middle-income countries [60][65]. - The findings highlight the challenges posed by widespread beliefs that educational and professional advancement is not based on meritocracy, which can hinder support for necessary reforms [63].