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Explaining Intergenerational Income Persistence: Non-cognitive Skills, Ability and Education

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  • Jo Blanden
  • Paul Gregg
  • Lindsey Macmillan

Abstract

The recent literature on intergenerational mobility in the UK has been focused on measuring the level and change in the relationship between parental income and children’s earnings as adults among recent cohorts. This paper is the first to analyse in detail the factors that generate these links. The paper seeks to account for the level of income persistence in the 1970 BCS cohort and also to explore the decline in mobility in the UK between the 1958 NCDS cohort and the 1970 cohort. The mediating factors considered are childhood health, cognitive skills, non-cognitive traits, educational attainment and labour market attachment. We find that these variables together explain slightly more than half of the intergenerational link for men. Changes in the relationships between these variables, parental income and earnings are able to explain three quarters of the rise in intergenerational persistence across the cohorts. The increased persistence in the second cohort comes from an increased influence of parental income in determining educational attainment, especially higher education, and labour market attachment. It is also clear that the stronger relationship between parental income and education comes in part through the growing relationship between parental income and the non-cognitive characteristics that influence education outcomes.

Suggested Citation

  • Jo Blanden & Paul Gregg & Lindsey Macmillan, 2006. "Explaining Intergenerational Income Persistence: Non-cognitive Skills, Ability and Education," The Centre for Market and Public Organisation 06/146, The Centre for Market and Public Organisation, University of Bristol, UK.
    • Handle: RePEc:bri:cmpowp:06/146
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    File URL: http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp146.pdf
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    References listed on IDEAS

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    Cited by:

    1. Fali Huang & Myoung‐jae Lee, 2009. "Does Television Viewing Affect Children'S Behaviour?," Pacific Economic Review, Wiley Blackwell, vol. 14(4), pages 474-501, October.
    2. Janet Currie & Mark Stabile, 2007. "Mental Health in Childhood and Human Capital," NBER Chapters, in: The Problems of Disadvantaged Youth: An Economic Perspective, pages 115-148, National Bureau of Economic Research, Inc.
    3. Frijters, Paul & Johnston, David W. & Shields, Michael A., 2011. "Destined for (Un)Happiness: Does Childhood Predict Adult Life Satisfaction?," IZA Discussion Papers 5819, Institute of Labor Economics (IZA).
    4. Almond, Douglas & Currie, Janet, 2011. "Human Capital Development before Age Five," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 15, pages 1315-1486, Elsevier.
    5. Pfeiffer, Friedhelm & Reuß, Karsten, 2008. "Age-dependent skill formation and returns to education," Labour Economics, Elsevier, vol. 15(4), pages 631-646, August.
    6. Nattavudh Powdthavee & Anna Vignoles, 2008. "Mental Health of Parents and Life Satisfaction of Children: A Within-Family Analysis of Intergenerational Transmission of Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 88(3), pages 397-422, September.
    7. Eduardo Rodrigues-Oreggia & Samuel Freije, 2012. "Long term impact of a Cash-Transfers Program on Labor Outcomes of the Rural Youth," CID Working Papers 230, Center for International Development at Harvard University.
    8. Datta Gupta, Nabanita & Lausten, Mette & Pozzoli, Dario, 2012. "Does Mother Know Best? Parental Discrepancies in Assessing Child Functioning," IZA Discussion Papers 6962, Institute of Labor Economics (IZA).
    9. Paul Gregg & Katharina Janke & Carol Propper, 2008. "Handedness and Child Development," The Centre for Market and Public Organisation 08/198, The Centre for Market and Public Organisation, University of Bristol, UK.
    10. Nabanita Datta Gupta & Mette Lausten & Dario Pozzoli, 2018. "Does mother know best? Parental discrepancies in assessing child behavioral and educational outcomes," Review of Economics of the Household, Springer, vol. 16(2), pages 407-425, June.
    11. Želinský, Tomáš & Mysíková, Martina & Večerník, Jiří, 2016. "Occupational Mobility, Educational Mobility and Intergenerational Transmission of Disadvantages in Europe," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 64(3), pages 197-217.
    12. O'Connell, Michael & Sheikh, Hammad, 2008. "Achievement-related attitudes and the fate of "at-risk" groups in society," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 508-521, August.
    13. Powdthavee, Nattavudh & Stutzer, Alois, 2014. "Economic Approaches to Understanding Change in Happiness," IZA Discussion Papers 8131, Institute of Labor Economics (IZA).
    14. Janet Currie, 2009. "Healthy, Wealthy, and Wise: Socioeconomic Status, Poor Health in Childhood, and Human Capital Development," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 87-122, March.
    15. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.

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    More about this item

    Keywords

    Intergenerational Mobility; Earnings; Family Income; Education;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I2 - Health, Education, and Welfare - - Education
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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