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Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality

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Author Info

  • Blanden, Jo

    ()
    (University of Surrey)

  • Gregg, Paul

    ()
    (University of Bath)

  • Macmillan, Lindsey

    ()
    (University of Bristol)

Abstract

Family income is found to be more closely related to sons' earnings for a cohort born in 1970 compared to one born in 1958. This result is in stark contrast to the finding on the basis of social class; intergenerational mobility for this outcome is found to be unchanged. Our aim here is to explore the reason for this divergence. We derive a formal framework which relates mobility in measured family income/earnings to mobility in social class. Building on this framework we then test a number of alternative hypotheses to explain the difference between the trends, finding evidence of an increase in the intergenerational persistence of the permanent component of income that is unrelated to social class. We reject the hypothesis that the observed decline in income mobility is a consequence of the poor measurement of permanent family income in the 1958 cohort.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6202.

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Length: 59 pages
Date of creation: Dec 2011
Date of revision:
Publication status: published in: Journal of the Royal Statistical Society, Series A (Statistics in Society), 2013, 176 (2), 541–563
Handle: RePEc:iza:izadps:dp6202

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Keywords: intergenerational income mobility; income inequality; social class fluidity;

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References

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  1. Philip Oreopolous & Marianne Page & Ann Huff Stevens, 2005. "The Intergenerational Effects Of Worker Displacement," Working Papers id:183, eSocialSciences.
  2. Black, Sandra E. & Devereux, Paul J., 2010. "Recent Developments in Intergenerational Mobility," IZA Discussion Papers 4866, Institute for the Study of Labor (IZA).
  3. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
  4. Jo Blanden & Paul Gregg, 2004. "Family income and educational attainment: a review of approaches and evidence for Britain," LSE Research Online Documents on Economics 19461, London School of Economics and Political Science, LSE Library.
  5. 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.
  6. Jo Blanden & Paul Gregg & Lindsey MacMillan, 2007. "Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education," School of Economics Discussion Papers 0307, School of Economics, University of Surrey.
  7. McIntosh, James & Munk, Martin D., 2009. "Social class, family background, and intergenerational mobility," European Economic Review, Elsevier, vol. 53(1), pages 107-117, January.
  8. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
  9. Jo Blanden, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 245-263, Summer.
  10. Corak,Miles (ed.), 2004. "Generational Income Mobility in North America and Europe," Cambridge Books, Cambridge University Press, number 9780521827607, November.
  11. Gottschalk, Peter T. & Huynh, Minh, 2006. "Are Earnings Inequality and Mobility Overstated? The Impact of Non-Classical Measurement Error," IZA Discussion Papers 2327, Institute for the Study of Labor (IZA).
  12. Dickens, Richard, 2000. "The Evolution of Individual Male Earnings in Great Britain: 1975-95," Economic Journal, Royal Economic Society, vol. 110(460), pages 27-49, January.
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Citations

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Cited by:
  1. Jäntti, Markus & Jenkins, Stephen P., 2013. "Income Mobility," IZA Discussion Papers 7730, Institute for the Study of Labor (IZA).
  2. Lindsey Macmillan, 2011. "Measuring the intergenerational correlation of worklessness," The Centre for Market and Public Organisation 11/278, Department of Economics, University of Bristol, UK.
  3. Joanne Lindley & Stephen Machin, 2012. "The Quest for More and More Education: Implications for Social Mobility," Fiscal Studies, Institute for Fiscal Studies, vol. 33(2), pages 265-286, 06.
  4. Jo Blanden & Lindsey Macmillan, 2014. "Education and Intergenerational Mobility: Help or Hindrance?," CASE Papers /179, Centre for Analysis of Social Exclusion, LSE.
  5. Jo Blanden & Lindsey Macmillan, 2014. "Education and Intergenerational Mobility: Help or Hindrance?," DoQSS Working Papers 14-01, Department of Quantitative Social Science - Institute of Education, University of London.
  6. Paul Gregg & Jan. O. Jonsson & Lindsey Macmillan & Carina Mood, 2013. "Understanding income mobility: the role of education for intergenerational income persistence in the US, UK and Sweden," DoQSS Working Papers 13-12, Department of Quantitative Social Science - Institute of Education, University of London.
  7. Lindsey Macmillan & Claire Tyler & Anna Vignoles, 2013. "Who gets the Top Jobs? The role of family background and networks in recent graduates' access to high status professions," DoQSS Working Papers 13-15, Department of Quantitative Social Science - Institute of Education, University of London.
  8. Jo Blanden, 2009. "How Much Can We Learn from International Comparisons of Intergenerational Mobility?," CEE Discussion Papers 0111, Centre for the Economics of Education, LSE.
  9. Arnaud Chevalier & Colm Harmon & Vincent O'Sullivan & Ian Walker, 2011. "The Impact of Parental Earnings and Education on the Schooling of Children," Working Papers 201112, Geary Institute, University College Dublin.
  10. Yaojun Li & Fiona Devine, 2011. "Is Social Mobility Really Declining? Intergenerational Class Mobility in Britain in the 1990s and the 2000s," Sociological Research Online, Sociological Research Online, vol. 16(3), pages 4.

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