Who You Meet Matters: International Evidence on Economic Connectedness and Social Mobility

Abstract We construct the first internationally comparable measure of offline economic connectedness (EC), extending the online framework of Chetty et al. to a cross-country setting. We conceptualize EC as access to individuals in high-status occupations and measure it as the probability that individuals from below-median income backgrounds are connected to at least one such individual (based on ISEI-88 classifications). We estimate EC both non-parametrically and using logistic specifications with country fixed effects and individual-specific controls to test for systematic cross-country differences. Using harmonized data across 13 Western countries, we document substantial variation in economic connectedness, ranging from below 51 % in countries such as Austria and Japan to over 78 % in Iceland and Switzerland. Consistent with findings for the U.S., we show that EC is positively correlated with intergenerational income mobility, suggesting that differences in social networks are associated with cross-country variation in economic opportunity.