THE AUSPICIOUS YEAR of the Dragon invariably sees a spike in the number of babies born. And what do most parents want for their children? Many have high hopes for their children when it comes to careers and life choices. But ultimately, most hope their children will have better lives than they did. That is, of course, a foggy concept as a better life means different things to different people. To some, it’s a university degree; to others, it’s attaining Singapore’s five Cs (cash, car, credit card, condominium and country club).
However, it’s safe to say that for most people, it means having greater social status among your peers, being more educated and moving up the income ladder. This notion of achieving greater socioeconomic status than your parents — known as intergenerational mobility — is of increasing interest in these times of rising income inequality, as it is tied to the idea of equal opportunity. Just because your family is poor shouldn’t mean you should stay poor.
The findings from a recent Ministry of Finance (MOF) study on intergenerational mobility suggest that mobility in incomes and education has been “relatively high” in Singapore, at least for boys born between 1969 and 1978. The sample comprised 39,500 father-son pairs, with daughters and younger sons left out to avoid gender or birth-order biases. The age group, comprising men between 30 and 39 years in 2008, was chosen due to limited income data available in Singapore. By global yardsticks, Singapore’s intergenerational mobility is better than in countries such as the US and UK. It is, however, lower than the Nordic countries and Canada, drawing on comparable 2010 OECD data.
To some extent, this socioeconomic mobility in Singapore was driven by growth. The economy has been in high gear, with GDP growth averaging a high 7.8% in the 1980s and 7.3% in the 1990s. At the same time, educational opportunities have expanded with new universities and higher education institutes springing up. As the MOF points out, a simple cross-tabulation of father-child educational attainment for children born between 1972 and 1978 suggests a fairly large increase in the child’s educational attainment over the father.
However, we are now at a pivotal point. Singapore’s future pace of growth, some economists believe, could languish in the low single digits. Moreover, there are now more degree holders and professionals in the workforce than ever before. In 2000, just 19% of Singapore residents aged 30 to 39 had a tertiary education. A decade on, 43% of 30- somethings have a university degree (or even multiple degrees).
INFLUX OF FOREIGN GRADUATES
Interestingly, not all of those graduates are Singapore citizens. According to the Department of Statistics, between 2000 and 2005, the proportion of university graduates among the citizen population increased from 9.5% to 14%. However, among permanent residents, the increase was much larger, rising from 33% to 40% over the same time. Additionally, within the 30- something age group, we find that as at 2010, one out of three was a PR. The comparable figure back in 2000 was closer to 18%.
In other words, owing to the influx of well-educated foreigners, intergenerational mobility in Singapore may be somewhat “artificial”, Paul Cheung, director of the UN statistics division, pointed out at a conference on Jan 16. Cheung was chief statistician of Singapore from 1991 to 2004.
Looking ahead, there is a good chance that more Singaporeans will go to university, as it is something that is prized within Asian society. Even so, the biggest gains in intergenerational mobility may already have been achieved. For the next generation onwards, mobility will be much harder to achieve, with Singapore’s labour force ageing rapidly and the gap in incomes at the top and bottom widening. “The bigger issue is [future] mobility and how much of a role foreigners will play,” says Cheung.
DEGREE NO GUARANTEE
In fact, a tertiary education may not be a sure ticket to job security or a better life. As Associate Professor Hui Weng Tat from the National University of Singapore points out, there are increasingly more highly educated people who are out of work, sometimes for long periods. Unemployment numbers from 1980 show a rising share of diploma holders and graduates among the jobless, with a sharp uptick from 2000. And, among those unemployed or retrenched as at 2010, 36.2% were PMETs (professionals, managers, executives and technicians).
More worryingly, when it comes to long-term unemployment, the share of the highly educated rose from just 4.4% in 1974 to 49% in 2010. Half of those were graduates. It’s hard to say how many of these professionals are voluntarily out of work or in early retirement. But the reality is that Singapore’s job landscape, buffeted by the twin forces of globalisation and new technology, is rapidly changing. Careers are becoming more short term and unpredictable and fresh skills are needed for new sectors that are opening up such as old-age healthcare.
As a result, young Singaporeans may need to pursue different education and employment paths and strategies from the past. As the economy moves onto a new and more erratic development path, the notion that most children are definitely going to be better off than their parents may no longer hold.
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