On inequality of opportunity and prospects for upward mobility

The paper looks at what shapes individuals' beliefs of future socio-economic mobility. Using Life in Transition survey (LiTS) data for a large set of Transition Economies and a number  of Western European countries, the paper examines, in particular, the link between beliefs about the importance of  personal connections for getting access to opportunities such as a good job or university education and aspirations of future socio-economic mobility. The data allow for several hypotheses to be tested empirically, in particular: hypothesis 1 – when the playing field is not even, connections improve the expectations of future socio-economic mobility; and hypothesis 2 – if informal connections are unavailable, an uneven playing field dampens the aspirations of future socio-economic mobility. The analysis of pooled sample data, as well as of subsets of European Union (EU) and non-EU countries, finds evidence in support of both these hypotheses: (i) lack of connections is associated with expectations of a lower position on the future social ladder; and (ii) when informal connections are unavailable, it matters for your aspirations whether you perceive connections to be vital or not. There is also some evidence that in the EU, where formal institutions are stronger, individuals are less likely to resort to informal institutions such as personal connections, even when these are available. Finally, the paper investigates whether perceptions of unequal access to opportunities are also linked with stronger redistributive preferences. The data suggest that this is indeed the case – perceiving informal  connections to be vital in order to progress in crucial dimensions of life is associated with a stronger preference for reducing the gap between the rich and the poor. When informal connections are unavailable, this is similarly associated with a stronger preference for redistribution.