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Intergenerational Persistence in Income and Social Class: The Impact of Increased Inequality

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Author Info
Jo Blanden
Paul Gregg
Lindsey Macmillan ()

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Abstract

Sociologists and economists reach quite different conclusions about how intergenerational mobility in the UK compares for those growing up in the 1970s and 1980s. Persistence in social class is found to be unchanged while family income is found to be more closely related to sons’ earnings for those born in 1970 compared to those born in the 1958. We investigate the reasons for the contrast and find that they are not due to methodological differences or data quality. Rather, they are explained by the increased importance of differences in income within social class for sons’ earnings in the second cohort. When economists measure intergenerational mobility their ideal is to see how permanent income is transmitted across generations. Our investigations show that the importance of within-social class differences in income mean that a single measure of income is a better predictor of permanent income status than fathers’ social class. We would not, therefore, expect the results for changes in intergenerational mobility based on income and social class to necessarily coincide.

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Publisher Info
Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 08/195.

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Length: 20 pages
Date of creation: Mar 2008
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Handle: RePEc:bri:cmpowp:08/195

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Related research
Keywords: Intergenerational mobility; Earnings; social class;

Find related papers by JEL classification:
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
I2 - Health, Education, and Welfare - - Education
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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References listed on IDEAS
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  1. Becker, Gary S & Tomes, Nigel, 1986. "Human Capital and the Rise and Fall of Families," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S1-39, July. [Downloadable!] (restricted)
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  2. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June. [Downloadable!] (restricted)
  3. Singh, S K & Maddala, G S, 1976. "A Function for Size Distribution of Incomes," Econometrica, Econometric Society, vol. 44(5), pages 963-70, September. [Downloadable!] (restricted)
  4. Nathan D. Grawe, 2004. "The 3-day Week of 1974 and Earnings Data Reliability in the Family Expenditure Survey and the National Child Development Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(4), pages 567-579, 09. [Downloadable!] (restricted)
  5. Anders Björklund & Markus Jäntti, 2000. "Intergenerational mobility of socio-economic status in comparative perspective," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 26, pages 3-32. [Downloadable!]
  6. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2007. "Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education," IZA Discussion Papers 2554, Institute for the Study of Labor (IZA). [Downloadable!]
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