Measuring the link between intergenerational occupational mobility and earnings: evidence from 8 European Countries (original) (raw)
Related papers
2011
Recent literature agrees that the degree of intergenerational mobility substantially differs across European countries, ranked between the "mobile" Nordic countries and the "immobile" Anglo-Saxon and Southern ones. In this paper we will compare the intergenerational transmission of advantages in 8 European countries using EU-SILC dataset. Considering parental occupations as background variable, our main aims are to assess whether residual returns to background on offspring's labour incomes persist after controlling for intermediated background-related outcomes (education and occupation) and to disentangle the role played by upward and downward occupational mobility on earnings. Our empirical analyses show that cross-country differences occur in the labour markets rather than in the educational stream. Consistently with previous findings, residual background effects on earnings are not significant in Nordic and Continental countries whereas they appear large in Anglo-Saxon and Southern ones. When the impact of backward and upward mobility is assessed, in all countries but Nordic ones penalties for upgrading emerge mostly in top occupations and are higher in less-mobile countries. These patterns are smoothened but preserved in bottom occupations and robust to different labour income measures.
The crucial aim of the paper is to look at the extent of intergenerational im-mobility from the occupational point of view and in an extensive international evidence. In a cross-country perspective, we intend to investigate the main spheres of family background - such as parents' behaviour or inheritance of human, social and financial capital - that matter most for the intergenerational linkage in terms of occupational decision-making. Consequently, we try to disclose how the impact of these determinants differs across a selected set of eight developed economies of Western Europe with dif- ferent welfare regime. In this light, we also aim at evaluating how, in a generational perspective, the macro-economic or cultural context, the institutional settings or policies and, finally, the different stage of economic development may help to cause the occupational choice. In order to look into the key determinants of intergenerational im-mobility, in terms of employment choice, and to ...
Estimation of intergenerational mobility in small samples: evidence from German survey data
Social Indicators Research
Using data from the German socio-economic panel, this paper provides new evidence on intergenerational mobility in Germany by focusing on intergenerational association in ranks—i.e. positions, which parents and children occupy in their respective income distributions. We find that the association of children’s ranks with ranks of their fathers is about 0.242 for individual labor earnings and it is higher for sons than for daughters. It is also higher in East Germany compared to West Germany. The results further show that rank-based measures of mobility are less sensitive than conventional measures of intergenerational income elasticity to different methodological and sample specification choices, such as the stages of the life cycle when incomes of children and parents are measured, the number of years for which incomes are considered, the treatment of zero values in income variables and the choice of annual versus hourly earnings. Moreover, they are more robust for sub-group compar...
Assessing changes in intergenerational earnings mobility
Previous research on changes in intergenerational mobility suggests that the mobility is decreasing over time. One explanation for this pattern is increased cross-sectional income inequality. In contrast to most other OECD countries, the income inequality in Norway has been remarkably stable through large parts of the 1980s and the 1990s, not the least due to a compression of the earnings distribution during the same period. Using longitudinal data for Norwegian children born 1950, -55, -60, and -65, we find a relatively high degree of earnings mobility. Furthermore, there is no tendency to increasing inequality along this dimension. This finding supports the hypothesis that intergenerational mobility is positively correlated with a compressed income distribution. Quartile father-child earnings transition matrices, together with nonparametric regressions, indicate quite high mobility in the middle of the distribution and somewhat more persistence at the top and bottom. This approach also reveals increased mobility over time for sons, but a less clear picture for daughters.
Equalizing or disequalizing lifetime earnings differentials? Earnings mobility in the EU: 1994-2001
2009
Abstract: Do EU citizens have an increased opportunity to improve their position in the distribution of lifetime earnings? To what extent does earnings mobility work to equalize/disequalize longer-term earnings relative to cross-sectional inequality and how does it differ across the EU? Our basic assumption is that mobility measured over a horizon of 8 years is a good proxy for lifetime mobility. We used the Shorrocks (1978) and the Fields (2008) index.
Intergenerational earnings mobility : an evaluation using data on three generations
This paper examines the extent and evolution of intergenerational earnings mobility in France. We use data from five waves of the French Education-Training-Employment (FQP) surveys covering the period 1964 to 1993. Our estimation procedure follows Björklund and Jäntti (1997)'s two-sample instrumental variable method. On our samples, the elasticity of son's (respectively daughter's) long-run income with respect to father's long run income is around .4 (resp. .3) with no significant change over the period under scrutiny. Comparing these estimates to results obtained from other studies suggest that intergenerational mobility is higher in France than in the United States and United Kingdom and lower than in Scandinavian countries.
Intergenerational Mobility: Trends Across the Earnings Distribution
The analysis, based on register data for Norwegian cohorts born 1950, 1955, and 1960, shows that the intergenerational earnings mobility is high. Using quantile regression, mobility is found to be lower at the lower end of the earnings distribution than at the upper end. The findings also indicate that mobility increases over time and that the increase seems to be somewhat higher for lower earnings. Finally, we find that the increase in earnings mobility over time has been larger for women than for men.
Nonlinear Estimation of Lifetime Intergenerational Economic Mobility and the Role of Education
Previous studies of intergenerational income mobility have typically focused at on estimating persistence across generations at the mean of the distribution of sons' earnings. Here, we use the relatively new unconditional quantile regression (UQR) technique to consider how the association between parental income in childhood and sons' adult earnings vary across the distribution of sons' earnings. We find a Jshaped relationship between parental income and sons' earnings, with parental income a particularly strong predictor of labour market success for those at the bottom, and to a greater extent, the top of the earnings distribution. We explore the potential role of early skills, education and early labour market attachment in this process. Worryingly, we find that education is not as meritocratic as we might hope, with the role of parental income dominating that of education at the top of the distribution of earnings. Early unemployment experience has long-lasting impacts on sorting those at the bottom, alongside parental income.
Measuring intergenerational earnings mobility in Spain: A selection-bias-free approach
2000
This paper analyses intergenerational earnings mobility in Spain correcting for different selection biases. We address the co-residence selection problem by combining information from two samples and using the two-sample two-stage least square estimator. We find a small decrease in elasticity when we move to younger cohorts. Furthermore, we find a higher correlation in the case of daughters than in the case of sons; however, when we consider the employment selection in the case of daughters, by adopting a Heckman-type correction method, the difference between sons and daughters disappears. By decomposing the sources of earnings elasticity across generations, we find that the correlation between child's and father's occupation is the most important component. Finally, quantile regressions estimates show that the influence of the father's earnings is greater when we move to the lower tail of the offspring's earnings distribution, especially in the case of daughters' earnings.
Intergenerational Income Mobility in the UK:New evidence using the BHPS and Understanding Society
2019
Using a new dataset combining the British Household Panel Survey and Understanding Society, I estimate the intergenerational income elasticity in the UK for individuals born between 1973 and 1991. Employing the traditional OLS approach as well as an alternative two-stage residual method that better controls for life-cycle effects, my results indicate that the intergenerational income elasticity is approximately 0.25. This means that around one quarter of every additional 1% of income advantage enjoyed by parents is passed on to their children. I also estimate income rank coefficients, which are a measure of positional mobility in the income distribution and these results corroborate the analysis of elasticities. These main results are largely robust to changes in the specifications of the model, sample restrictions and to the use of different measures of income. I also obtain regional estimates of mobility, and find large differences between the North and South of England