In My Brilliant Career, Miles Franklin gave Australia a portrait of frustrated talent in the figure of Sybylla Melvyn. Sybylla is intelligent, ambitious, restless and painfully aware of the narrow world around her. She knows she has ability, and she can see how few doors are open to a girl in her position. Her family’s fortunes are sliding, money is scarce and marriage to a wealthier man is held out as the respectable route upward. She refuses it. The book’s title is ironic: this is not the story of a brilliant career fulfilled, but of one blocked at the outset.
More than a century on, we still argue about the same question in different language. How tightly should a person’s future be tethered to their parents’ income, their suburb, their school or the people they happen to know? How much should a childhood predict?
As a politician, I see that as a question of fairness. As an economist, I see it as a question of efficiency. A country is less productive when it does a poor job of finding talent, nurturing talent and deploying talent. Social mobility is not only about justice between citizens. It is also about whether we are making full use of the abilities of our own people.
That matters because talent is common, while opportunity is not.
Australians like to tell ourselves a flattering story. We are not aristocratic, we say. We are not a society of fixed ranks. We are a place where a child from modest beginnings can make something of themselves. There is enough truth in that story to keep it alive. But we could do better.
Australia performs respectably by international standards on intergenerational mobility. The latest research suggests that, compared with many advanced countries, the link between parents’ earnings and children’s later earnings is weaker here. That is encouraging. Yet it does not follow that we can relax. Tomas Kennedy and Peter Siminski find that absolute mobility, the simple question of whether children out‑earn their parents, has slipped over time. More than 80 per cent of baby boomers earned more than their parents at a comparable age. For Australians born in the late 1970s and early 1980s, that figure is closer to two‑thirds.
Some of that reflects slower growth. Some reflects wider inequality. Both make it harder for a country to keep faith with the promise that each generation will have a broader horizon than the one before.
Once upon a time, economists told themselves the story that we didn’t need to worry much about inequality, because society was so mobile. It did not matter much if some started high and others low, so long as children could move easily up and down the ladder. But as economists have gathered better data, the research tells a harsher story. Countries with greater inequality tend also to have less mobility. As the rungs on the ladder stretch further apart, it becomes harder to climb up or down. Summing up his team’s findings, US economist Raj Chetty notes: ‘Your chances of achieving the American Dream are almost 2 times higher … if you are growing up in Canada than in the United States’.
Australia is more mobile and more egalitarian than the United States. But Australia still has plenty of room to improve. Boosting mobility isn’t just good for fairness – it can also improve the productivity of the economy.
Economists are used to thinking about misallocation across firms and industries. We worry when capital is trapped in weak businesses, or when workers are stuck in jobs that make poor use of their skills. Social mobility asks us to think about misallocation across lives. How much ability lies dormant because a child grew up in unstable housing, poor health or a neighbourhood cut off from jobs and useful networks? How much promise is never recognised because nobody around them knows what it looks like, or how to help it grow?
In an economy increasingly shaped by ideas, engagement, skill and judgement, it’s vital we’re encouraging talent to flourish. Just as professional sporting teams benefit from youth feeder leagues and talent scouts, economies succeed when they seek out ability in unexpected places. A society that draws its inventors, entrepreneurs, managers and professionals from too narrow a slice of the population is leaving productive capacity idle.
The evidence on innovation is particularly strong. Research from the United States shows that children from the richest 1 per cent of families are 10 times as likely to become inventors as children from below‑median households, even when you compare children with similar maths performance early in life. That figure is striking because it suggests the problem is not a shortage of inventive ability. The problem is that some children are much more likely to encounter the classrooms, mentors, institutions and expectations that turn ability into achievement.
Australia has its own version of that story. Data from the latest Startup Muster survey suggests that only about 1 in 9 founders come from lower socioeconomic backgrounds. We might think of those who miss out as lost Fiona Woods and Elizabeth Blackburns: children with the native ability to transform burns medicine or molecular biology, whose path never crosses the teacher or mentor that would have let that ability flower. That’s not just a gross inequity, it’s a productivity loss, pure and simple.
Mobility can no longer be confined to academic debates among philosophers, sociologists and economists. The newer research – looking at health, place, peers and connection – has direct policy implications.
Consider neighbourhoods. Australian work using de‑identified tax data has examined more than 300,000 cases of families moving during childhood. Researcher Nathan Deutscher finds that where a child grows up has a lasting effect on adult outcomes, including income and education. Timing matters too. Moving earlier tends to have larger effects than moving later. Opportunity, in other words, is rooted in streets, schools, sporting clubs, public transport links and local expectations.
This should shift the way we think about housing.
Housing policy is not only critical for wellbeing and wealth. In many cases, the housing market also decides who gets access to high‑opportunity neighbourhoods. It decides which children are near stronger schools, safer streets, better services and richer social networks. The cost of a home is becoming the fee charged for entry to a better life.
In the first 2 decades of the twenty‑first century, Australia failed to build enough homes. The result was higher rents, higher prices and a tighter grip of inherited advantage, stored in land and passed on. Building more homes eases pressure on buyers and renters, makes it easier for workers to live near where the jobs are and creates more opportunities for children.
The same goes for early childhood and health. If a child arrives at school with chronic illness or untreated trauma, they are already carrying a heavier load than their classmates. That has consequences for fairness and for the shape of the labour force 2 decades later. The making of a productive economy starts well before the first pay packet. It begins in homes, clinics, preschools and playgrounds.
To say this is not to deny personal agency. People do overcome bleak odds. Australia has no shortage of such stories. But public policy should not be built on heroic exceptions. The task is not to admire those who scramble over the wall. It is to ask why the wall is there in the first place, and how to bring it down.
There is an old tendency in public debate to separate growth from fairness, as though one belongs to hard‑headed economists and the other to soft‑hearted idealists. Social mobility exposes the falsity of that divide. A country that makes better use of the abilities of its people will usually be fairer. It will also usually be richer.
That is why mobility is so important for economic policy – because wasted ability is an economic failure. The title My Brilliant Career still carries a warning. Australia has no shortage of talent or ambition. The challenge is to open more doors, in more suburbs, for more children.