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Measuring the link between intergenerational occupational mobility and earnings: evidence from 8 European Countries

This paper provides a novel glance on the relationship between family background and earnings applying a synthetic index of social mobility built on distributions of parental and offspring occupational statuses. Using the EU-SILC dataset for 8 countries, our analysis shows that country differences mainly concern residual background correlations, left after controlling for background-related intervening factors such as education and occupation. Significant residual correlations, observed in the UK and in Southern countries, mask respectively penalties to upward mobility and an insurance against downward mobility. Insignificant residual effects encompass significant penalties to both downward and upward mobility in Germany and France, a parachute for self-employed in Ireland and no patterns in Nordic countries. In quantile regressions, residual background correlations appear to increase along the earnings distribution. Even if we are not able to provide causal explanations, we suggest that in unequal countries results would hardly agree with a standard human capital explanation.

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Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2011-03.

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Date of creation: Mar 2011
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Handle: RePEc:fce:doctra:1103
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  1. Jo Blanden & Stephen Machin, 2004. "Educational inequality and the expansion of UK higher education," LSE Research Online Documents on Economics 17497, London School of Economics and Political Science, LSE Library.
  2. Jo Blanden & Paul Gregg & Lindsey Macmillan & Lindsey Macmillan, 2006. "Accounting for Intergenerational Income Persistence: Non-Cognitive Skills, Ability and Education," CEE Discussion Papers 0073, Centre for the Economics of Education, LSE.
  3. Jo Blanden, 2009. "How much can we learn from international comparisons of intergenerational mobility?," LSE Research Online Documents on Economics 28283, London School of Economics and Political Science, LSE Library.
  4. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
  5. Dan Andrews & Andrew Leigh, 2008. "More Inequality, Less Social Mobility," CEPR Discussion Papers 566, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  6. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 999-1028.
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