Why Progressives Are Wrong to Long for Danish Welfare

James Heckman. 

"Democrats are doing their best to advance President Biden's $2 trillion "Build Back Better" agenda. The bill is being heralded as an engine of economic mobility for American families, and includes things like paid family leave and universal pre-K, which would be firsts for America.

In making the case for these programs, progressives often draw on the Danish welfare state for inspiration, with its low levels of income inequality and high levels of mobility in income across generations. They attribute these features to the many generous social policies Denmark has in place; Denmark for example offers tuition-free education from pre-K to PhD with substantial support. And Sen. Bernie Sanders (I-VT), a staunch supporter of Build Back Better, regularly points to Denmark as the model welfare state.

But Sanders and other progressive admirers of the Danish welfare state should note that despite generous policies, there is substantial inequality in child outcomes across social and economic classes in Denmark. Contrary to the views of progressives, despite the striking policy differences between Denmark and the U.S., these differences are not reflected in intergenerational educational mobility.

For example, family influence in Denmark is comparable to what it is the United States; children of college-educated women do substantially better than children of high school dropouts in both countries.

Inequality in both countries is not easily mitigated by welfare state policies and is not truly addressed in Build Back Better. It is undeniable that equality in access to public services does not guarantee equality of opportunity or equity, nor does it do anything about the fact that more advantaged families are better able to access and utilize programs, even when they are universally available. Irrespective of the availability of welfare programs, family influence remains sorted by social class, because birds of a feather flock together; residential and community clustering by social class is well-documented in both the U.S. and Denmark.

The result is that even in Denmark, where most children attend public schools, for which expenditures are equalized everywhere at the national level, more advantaged families are still better positioned to influence the quality of their children's schools.

Not only are families sorted by their financial resources, but there is also a strong positive association between the educational and personal traits of parents and teachers: The most able teachers work in schools with the most affluent student bodies, despite equality in expenditure and salaries across schools. In short, universal provision of public services does not mitigate family advantage and may even magnify it, as more advantaged parents tend to game the system.

Progressives wishing to fight inequality would do well to learn a different lesson from Denmark than the one they seem to have. The lesson is not that expanded welfare mitigates inequality, but the opposite; the generous provision of social services does not eliminate inequality in many important life outcomes across generations. In late adolescence, test scores in Denmark are as unequal across children from different family backgrounds as in the U.S. In other words, the apple falls about as close to the tree in Denmark as in the U.S.

How can it be that despite more generous Danish policies, children's and their parents' education is roughly the same in Denmark as it is in America? The reason is that there are other barriers to educational attainment besides money—specifically, the skills and motivations required to complete an education.

Progressives may not like to admit it, but the truth is that the origins of inequality and social mobility lie elsewhere—in the family.

Families shape children's skills and motivations, and families operate through multiple channels. They do so both through direct parental interactions with children, stimulating child learning, choosing specific neighborhoods, and determining the quality of education, as well as through guidance on important lifetime decisions.

The most important source of childhood is the family. And anyone truly wishing to combat inequality should recognize this. Yet explicit discussions of family influence are generally off-limits in progressive circles.

Those progressives often tout upward mobility in Denmark. But the Danish system achieves its lower income inequality and greater intergenerational income mobility primarily through its tax and transfer programs, not by building the skills of its children across generations and fostering their human potential more effectively.

Parenting still matters most. In the United States and abroad, strengthening families needs to be front and center in promoting social mobility across generations. And this is doubly true for people wishing to combat inequality."