Period Changes in Intergenerational Income Mobility between Welfare State Contexts in South Korea and the United States

Background/Purpose: Social mobility has stalled or declined in most advanced welfare states in an era of rising inequality, implying that socioeconomic disadvantages persist across generations and questioning the permeable class structure premised by a capitalist democracy. Welfare state policies aim to enhance upward social mobility for the citizenry by reducing inequality and promoting inclusive growth; however, social mobility is rarely examined as embedded within the institutional and sociocultural contexts of alternative forms of the market economy welfare state.

Methods: Although South Korea and the United States have generally similar residual and limited welfare state regimes, this study finds that the intergenerational income mobility (IGM) trends in recent decades differ remarkably between the two countries; thus, this paradox becomes the focus of the study. This study analyzes cross-national differences in IGM in South Korea and the United States for two birth cohorts representing contrasting period effects: between 1980-1995 and 1996-2015, using data from the Korean Labor and Income Panel Study in South Korea and the Panel Study of Income Dynamics in the United States. It then conducts a historically informed comparative analysis of between-country mobility differences as contextualized by different philosophical underpinnings of the welfare state—Confucian familial orientation in South Korea vs. libertarian individualistic orientation in the United States.

Results: This study presents findings in four areas. First, findings suggest no period effects on IGM in both countries, though the Korean IGM improved and the U.S.’s IGM eroded. Second, results suggest that women’s IGM in Korea changed: shifting from less to more mobile than that of men between the two study periods; whereas in the United States, IGM eroded for both men and women, with the erosion of IGM particularly pronounced among women. Third, results indicate that not only income but also family structure impacts IGM in both countries. Finally, this study theorizes that it is plausible that more favorable IGM trends in Korea might in part be attributable to the benefits of its Confucian Welfare State orientation, which emphasizes promoting family system support and responsibility, over the more individualistic orientation of the American welfare state.

Conclusions/Implications: This study contributes to social mobility research by highlighting the role of the welfare state. Researchers should move towards comparative and creative analytical strategies to make clear how economic and institutional characteristics of different countries facilitate the intergenerational reproduction of advantage and disadvantage. To enable upward mobility for disadvantaged families, policymakers and practitioners should redirect attention from individual characteristics toward social welfare policies and socio-political institutions.