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Intergenerational Mobility, Economic Shocks, and the Role of Human Capital

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  • Patrick Bennett
  • Jessica Botros

Abstract

How do economic shocks at the time of labor market entry interact with the intergenerational persistence of disadvantage? While the importance of family background for future labor market success outweighs the impact of increased unemployment, negative economic shocks disproportionately harm those from disadvantaged backgrounds. As a result, a one standard deviation increase in unemployment causes a 11–15% decrease in intergenerational mobility. Mobility decreases as higher unemployment widens the pre-existing gap in college education by socioeconomic status, and we show that differences in human capital are a key factor which explain rates of both relative and absolute mobility.

Suggested Citation

  • Patrick Bennett & Jessica Botros, 2024. "Intergenerational Mobility, Economic Shocks, and the Role of Human Capital," Working Papers 10, University of Liverpool, Department of Economics.
    • Handle: RePEc:liv:livedp:202410
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    File URL: https://www.liverpool.ac.uk/media/livacuk/schoolofmanagement/departmentofeconomics/workingpapers/ECON,WP,202410.pdf
    File Function: First version, 2024
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    intergenerational mobility; education; unemployment;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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