Denmark has many generous social policies that American progressives seek to emulate. Yet Denmark also has substantial inequality of child outcomes across social and economic classes comparable in magnitude to those in the US.
Progressive advocates in the US often point to Denmark as a model welfare state with low levels of income inequality and high levels of social mobility in income across generations. Denmark has many generous social policies in place that progressives currently seek to emulate: There are well-funded social security, disability, and unemployment programs, and inequality in disposable income is much lower than in the US.
The Danish policies now advocated for adoption in the US include free college tuition, universal access to high-quality health care, equal per-pupil expenditures across all neighborhoods, universal high-quality pre- K, and generous childcare and maternity leave policy.
Advocates should note, however, that despite generous social policies and equality in access for all citizens, substantial inequality of child outcomes remains across social and economic classes in Denmark. Family influence on many child outcomes in Denmark is comparable in magnitude to those in the US. For example, children of college-educated women do substantially better than children of high school dropouts on many dimensions in both countries.
The Role of the Family
Common forces are at work in both countries that are not easily mitigated by welfare state policies. One overarching conclusion from our study is that formal equality in access does not guarantee equality of opportunity. More advantaged families are better able to access and utilize programs, even when these are universally available. The most apparent channel through which this is manifested is sorting by social class. Increasing sorting in neighborhoods by family status is a well-documented trend in the US. Comparable patterns are at work in Denmark. People with similar socioeconomic attributes increasingly tend to cluster together.
The result is that—even in Denmark, where most children attend public schools for which expenses are equalized at the national level—more advantaged families are better able to influence the quality of their children’s schools. Not only are families sorted by family resources, but there is also a strong positive association between the characteristics of parents and the characteristics of teachers. The most able teachers work in schools with the most affluent student body despite equality in expenditure and salaries across schools.
Universal provision of public services does not necessarily mitigate advantages and may even exacerbate inequality due to the operation of Matthew Effects:
“to those who have, more is given.”—Matthew 25:29 RSV
Generous provision of social services does not eliminate inequality in many important life outcomes across generations. The origins of inequality and social mobility lie elsewhere. Families shape child outcomes. And families operate through multiple channels. They do so both through direct parental interactions with children in stimulating child learning, personality, and behaviors through choice of neighborhoods and thereby the quality of institutions and peers; and through guidance on important lifetime decisions.
Educational Mobility is Similar in Denmark and the US
One of the most striking policy differences between Denmark and the US is in the educational system, where Denmark has tuition-free education from pre-K to PhD and gives generous education support.
Yet, contrary to conventional wisdom, the differences in the Danish welfare state and that of the US are not reflected in intergenerational educational mobility. Despite the more generous Danish policies, the association between children’s and their parents’ education is roughly the same in the two countries.
Educational mobility in Denmark measured by the correlation between parent and child educational attainment was substantially higher than in the US for earlier cohorts. This was a result of differences in base education levels, where Danish levels of completed education were substantially below those of the US. However, as educational attainment—and particularly college completion rates—in Denmark have converged towards those in the US, so has educational mobility.
How can this be? The reason is that there are other barriers to educational attainment than financial ones: the skills required to complete an education. In late adolescence, test scores in Denmark are as unequal across children from different family backgrounds in the US. In other words, the apple falls about as close to the tree in Denmark as in the US. Common mechanisms underlying the persistent inequality across generations operate in the two countries despite differences in programs and social expenditure. The most important source of development during childhood and youth is the family.
Transmission of Well-Being
The finding that similar mechanisms are in play in Denmark and the US at first glance appears to contradict the long line of research in intergenerational income mobility, where Denmark is often portrayed as having much higher mobility than the US.
Yet, it is important to keep in mind that Denmark achieves lower income inequality and greater intergenerational income mobility primarily through its tax and transfer programs, and not by building the skills of children across generations and promoting their human potential more effectively. In fact, we show that the traditional emphasis on intergenerational income transmission, which has been the focus when discussing inequality of opportunity, gives a limited picture of the actual transmission of lifetime well-being across generations.
Our unique data from Denmark span the full lifecycles of children and their parents. They show that resources and well-being are much more tightly linked across generations than previously believed. Our findings suggest that progressive advocates miss a substantial contributor to the persistence of inequality across generations: parenting.
What Can be Learned?
Our study provides new insights on the sources of intergenerational transmission of education and well-being, and specific channels through which affluent parents support the development. Not only does our study provide new knowledge, it also suggests that researchers and advocates should critically re-examine yesterday’s dogmas. Our results beg further investigation to pursue a deeper understanding of how parents affect child development, including through direct interactions at home and through purposive sorting in making neighborhood choices. Strengthening families needs to be front and center in policies promoting social mobility across generations.
Since equal Danish provision of services does not eliminate inequality in many important life outcomes, an uncritical adoption of Danish policy initiatives is not an effective way to ensure equality of opportunity. Universal programs benefit advantaged families.