The book Social Sustainability in Ageing Welfare States discusses social sustainability from different perspectives. In their book chapter, Toni Juuti and Ohto Kanninen reveal what the decline in income mobility says about our well-being and satisfaction with life.
For decades, a central part of the “American Dream” has been the belief that each generation will be better off than the last. But what happens when that dream fades—not just in the U.S., but across the developed world?
Recent research shows that fewer people today earn more than their parents did at the same age. This phenomenon, called absolute intergenerational mobility, has been declining since the mid-20th century. The big question is: Does this decline affect how happy or satisfied people feel about their lives?
Mobility Is Falling, But So What?
From Japan to the U.S. and across Europe, the share of people surpassing their parents’ income has plummeted. In Japan, for example, over 90% of those born in 1950 earned more than their parents; for those born in 1980, it’s closer to 55%.
The reasons include slower growth in many countries, rising income inequality in some, and a diminished role for relative mobility—that is, how children rank on the income ladder compared with their parents.
So with fewer people outperforming their parents, are we all just more miserable? Surprisingly, no.
Happiness Isn’t Just About Out-Earning Your Parents
Together with Ohto Kanninen, we argue that subjective well-being — how happy or satisfied people say they are—hasn’t declined in tandem with falling mobility. Their data shows that even in countries with steep drops in mobility (like Japan), life satisfaction and happiness levels have held steady or even increased.
Why? Here are a few possible explanations: people don’t necessarily use their parents’ income as a benchmark, with daily life and peer comparisons often mattering more; material well-being has changed, so someone with the same income as their parents may still enjoy far better technology, healthcare, and entertainment; and cultural and social factors evolve, shifting how people define a good life.
Measuring the Disconnect
We use data from ten advanced economies, tracking absolute mobility alongside surveys of happiness and life satisfaction. The result? We find no strong correlation between declining mobility and declining well-being; in some cases (like Japan), well-being increased while mobility fell; and economic growth does relate to well-being, but not necessarily through the lens of surpassing one’s parents. Our findings challenge a common narrative: that economic stagnation between generations must lead to social despair. In fact, people’s happiness may be more resilient—and more complex—than we give it credit for.
Of course, this doesn’t mean we should ignore economic inequality or slow growth. But fewer people out-earning their parents isn’t necessarily a sign of social collapse.
As our societies age and growth slows, high absolute mobility might be a thing of the past. However, well-being can still flourish—even in a world where the economic ladder doesn’t stretch quite as high as it once did.
Chapter
Juuti, T. & Kanninen, O. (2025). The fall in absolute intergenerational mobility: consequences for subjective well-being in: Vaalavuo, M. & Nelson, K. & Kuitto, K. (eds.) (2025) Social Sustainability in Ageing Welfare States. Edward Elgar Publishing. 140–165.
About the book
Social Sustainability in Ageing Welfare States (eds. Vaalavuo, Nelson & Kuitto): Social Sustainability in Ageing Welfare States. This is an Open Access title.
